49439 - Project Amal

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Summary of Investment Information

Project Number

49439

Company Name

BANK OF PALESTINE PLC

Date SPI Disclosed

Jul 14, 2025

Country

West Bank and Gaza

Region

Middle East

Projected Board Date

Jun 6, 2024

Environmental Category

FI-2 - Limited

Status

Active

Last Updated Date

Jul 17, 2025

Department

CF5MI - Regional Industry FIG MCT/FIG Middle East

Industry

Financial Markets

Previous Events

Approved : Jun 6, 2024
Signed : Jun 28, 2024
Invested : Aug 22, 2024

Sector

Commercial Banking - General

Additional Project Attributes

Blended Finance

Project Description

The proposed investment package of up to US$90 million to the Bank of Palestine (BoP or the Bank) entails (i) an IFC equity investment of up to 5% shareholding (up to US$25 million); and (ii) a senior unsecured loan package of up to US$65 million for on-lending to retail and SMEs (the Project). The loan package includes an (a) IFC A Loan of up to US$25 million, (b) an up to US$6.5 million concessional subordinated loan from IFC acting in its capacity as the implementing entity of the Global Small & Medium Enterprise Facility (“GSMEF”), and (c) an up to US$3.5 million concessional subordinated loan from IFC acting in its capacity as the implementing entity of the MENA Private Sector Development Facility (“MENA PSD”), to which IFC and IFC in its capacity as the implementing entity of the MENA PSD [may] agree arrangements on transferring some shares from IFC to IFC in its capacity as implementing entity of the MENA PSD of value up to US$3.5 million following the repayment of the loan package. IFC also expects mobilize up to US$30 million through parallel loans. The proposed Project is IFC’s initiative to mitigate the severe impacts of the ongoing conflict in the Middle East, through a long-term strategic IFC partner, and supporting the banking sector in the West Bank and Gaza (WB&G) in an extraordinarily challenging time. The investment aims to stabilize the financial sector during distress, signalling confidence to draw in other like-minded investors. Equally importantly, the Project aims to provide the Bank the opportunity to remain in a liquid and sufficiently capitalized financial position to support the livelihood of the WB&G economy and play a leading role in the post-conflict reconstruction efforts. The Project is expected to be supported by the GSMEF and MENA PSD.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	25.0
Equity	25.0

IFC's loan to the financial institution described in this SII is targeted for on-lending to the following sector(s):

Product Type	Use of Proceeds
Straight Senior Loan	Loans to SME Borrowers
Straight Senior Loan	Loans to SME Borrowers
Straight Equity	Loans to SME Borrowers
Straight Senior Loan	Loans to SME Borrowers

IFC's Definitions of Targeted Sectors can be found here.

Development Impact

Project outcome Stakeholder effects - Increase access to SME finance: IFC anticipates that the Project will support the preservation and growth of SME lending in WB & Gaza by shoring up funding to BoP. SMEs in the country face serious access to finance constraints which have deteriorated significantly due to the ongoing conflict. Even before the conflict financial intermediation was already lackluster. Contribution to Market Creation Resilience: IFC's project is anticipated to promote the resilience of the SME finance market in WB&G by shoring up the capital base and liquidity of the largest bank in the country. In so doing, the Project will support the stability of a systemically important bank in the market and ensuring continuous flow of liquidity to SMEs operating in a highly challenging environment.

Financial additionality Financing structure: The liquidity line provided by IFC is crucial for offering financing that is otherwise inaccessible in the market, particularly on fair terms. The funding structure of the Bank comprises deposits (76% of total assets), borrowings (2.8% of total assets) and equity (9.0% of total assets). Term deposits only formed 19% of customer deposits, as CASA formed the majority of customer deposits at 81% as of Q2-2023, while borrowing sources are mainly from DFIs. Own Account Equity: Amidst the Conflict in the Middle East, conventional commercial investors are deterred by heightened risks. Additionally, IFC's equity investment is expected to marginally strengthen the capitalization of BOP, which is particularly important given the significant impact of the Conflict in the Middle East on its financial stability and the challenge of securing such support under current circumstances. Resource Mobilization: IFC aims to bring in other DFIs in providing a liquidity line. This is key, especially in conflict situations, as it sustains the financial ecosystem by attracting investors to regions perceived as risky. Non-Financial Additionality: Risk Mitigation. IFC plays a crucial role in bolstering confidence among depositors and investors when investing in and extending a liquidity line to the largest bank operating in the West Bank and Gaza amid the ongoing Conflict in the Middle East as it sends a strong message of the Bank’s resilience and stability. The Bank's Gaza portfolio, accounting for 20% of its total gross portfolio, has significantly affected shareholder confidence. Consequently, the Bank's share price has rapidly declined since the onset of the Middle East Conflict, dropping from US$2.15 as of October 6, 2023 to US$1.70 per share as of January 8, 2024. IFC will attempt to bring in other DFIs in providing additional equity; further contributing to the stability of the Bank.

Indicator	Metrics	Calendar Year 2022	Calendar Year 2023	Calendar Year 2024
Number of Outstanding Loans, SMEs	loans	Pre-dates IFC investment	Pre-dates IFC investment	Not Available
Value of Outstanding Loans, SMEs	USDMill	Pre-dates IFC investment	Pre-dates IFC investment	Not Available
Board Composition - Women (% and #)	%	Pre-dates IFC investment	Pre-dates IFC investment	Not Available
Direct Employment (#) Operations And Maintenance	#	Pre-dates IFC investment	Pre-dates IFC investment	Not Available
Female Direct Employment (#) Operations And Maintenance	#	Pre-dates IFC investment	Pre-dates IFC investment	Not Available

E&S Category Rationale / Risks and Mitigation

The project consists of an investment package of up to 71 million USD to the Bank of Palestine (BoP) including: (i) an IFC equity investment of up to 5% shareholding; and (ii) a senior unsecured loan package of US$50 million. BoP’s Corporate and SME portfolios mainly comprise businesses in the sectors of trade in consumer goods, services, property and construction, manufacturing, financial and insurance services, auto trade, and tourism. These industry sectors present medium Environmental & Social (“E&S”) risks and impacts which are readily manageable. Hence, the project is categorized as Category FI-2 in accordance with IFC’s Environmental and Social Sustainability Policy. The typical risks associated with these sectors include labor and working conditions, occupational health and safety, air emissions, waste management, and handling of hazardous materials in the borrowers’ operations. The Project will not support any activities on IFC Exclusion List, coal-related activities, and/or borrowers involved in higher-risk business activities involving a) involuntary resettlement, b) risk of adverse impacts on Indigenous Peoples, c) significant risks to or impacts on the environment, community health and safety, biodiversity, cultural heritage, or d) significant occupational health and safety risks. For this investment, the E&S requirements will include the IFC Exclusion List, national E&S laws and regulations, and the IFC Performance Standards where applicable. The Bank will be required to comply with IFC’s Life and Fire Safety requirements and apply Performance Standard 2 requirements to its own operations and provide regular E&S performance reporting to IFC.

Key E&S issues associated with this project relate primarily to the E&S risks of the equity and debt projects, and the capacity and systems in place to manage such risks. The Bank has an appointed E&S officer and has an Environmental and Social Management System (“ESMS”) in place. To mitigate the risks inherent in the project, BoP will be required to: (i) update and implement the “ESMS”. The updated ESMS will align with IFC PS1 requirements for financial intermediaries (FIs) and for screening out higher risk transactions, (ii) Ensure ongoing capacity development for the E&S officer and the investment team, and (iii) update the internal grievance mechanism.

S.no	Title	Anticipated Completion Date
1	Establish ESMS	06/26/2024
2	Prepare an E&S Management System (ESMS) Training Plan	06/26/2024
3	Conduct Staff Training on the ESMS implementation	08/25/2024
4	HR procedures	06/26/2024

Contacts

For Inquiries About the Project, Contact

Bank of Palestine
Catherine Halteh
Investor Relations Manager
Mobile: +972 599 390429
catherine.halteh@bankofpalestine.com
P.O. Box 471, Ramallah, Palestine
https://bop.ps

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IFC supports its clients in addressing environmental and social issues arising from their business activities by requiring its real sector clients to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities in relation to environmental and social issues arising from IFC's clients' business activities. Since 2012, IFC's Financial Intermediary clients applying the Performance Standards are required to develop External Communications Mechanisms to receive and review inquiries or complaints from any interested party regarding the E&S risks and impacts of their operations.

For IFC projects that are active or under consideration, individual(s), or their authorized representative(s), who allege they have been or will be adversely affected by E&S risks or impacts arising from IFC's clients' business activities, may submit a complaint to IFC directly for consideration. When receiving an E&S complaint, IFC engages with complainants and works with its clients to find solutions to E&S concerns as quickly and efficiently as possible.

Complaints can be submitted to IFC online at www.ifc.org/escomplaints or by email to EScomplaints@ifc.org.

IFC complaint response is separate from and complementary to IFC’s clients’ project level grievance mechanisms and IFC’s Independent Accountability Mechanism (CAO). Lodging a complaint directly with IFC does not, at any time, restrict access to CAO.

Affected communities have unrestricted access to the Compliance Advisor Ombudsman (CAO), the independent accountability mechanism for IFC and MIGA. CAO facilitates the resolution of complaints related to IFC and MIGA projects and sub-projects, undertakes reviews of IFC’s and MIGA’s environmental and social compliance, fosters public accountability for their commitments, and enhances the environmental and social performance of IFC and MIGA.

Independent of IFC and MIGA management and reporting directly to the IFC and MIGA Boards of Executive Directors, CAO helps resolve issues raised about the environmental and social impacts of projects through a neutral, collaborative, problem-solving approach via its Dispute Resolution function. It also reviews IFC’s and MIGA’s compliance with environmental and social policies, assesses related harm, and recommends remedial actions through its Compliance function. Additionally, CAO provides advice to IFC, MIGA, and their Boards to enhance environmental and social sustainability performance and minimize the risk of harm.

Complaints may relate to environmental and social harm regarding any aspect of the planning, implementation, or impact of a project or sub-project, and can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of an IFC- or MIGA-financed business activity.

Complaints can be submitted by any of the following methods:

Online form: available at https://www.cao-ombudsman.org/
Mail/Hand Delivery to: 2121 Pennsylvania Avenue, NW, Washington, DC 20433, USA
Voice mail: +1 202 458 1973
Email: cao@worldbankgroup.org
SMS, WhatsApp, Telegram, and Signal: +1 202 650 2627

CAO receives and addresses complaints in accordance with the CAO Policy, which can be accessed at: https://www.cao-ombudsman.org/policies-guidelines.

This Summary of Investment Information (SII) is prepared by IFC to disclose a factual summary of the main elements of the potential investment. It also includes findings and recommendations related to environmental and social considerations regarding this potential investment. The purpose of the SII is to enhance the transparency of IFC’s activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this SII is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein. It is distributed in advance of IFC Board of Directors’ consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following SII is disclosed in accordance with IFC's Access to Information Policy (AIP) that went into effect on January 1, 2012.

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