Building Institutions and Economic Opportunity with $75 Million World Bank Grant to West Bank & Gaza

Washington, April 26, 2011 – World Bank support to West Bank and Gaza since 1993 has focused on helping the authorities build the necessary institutions of a future state while also helping build an economy that can create the jobs and opportunities needed by citizens. Recent World Bank reports have consistently noted achievements by the Palestinian Authority in delivering public services and institution building. Those same reports have also consistently flagged the bleak prospects for economic growth in a territory crisscrossed by barriers to trade and as a result heavily donor dependent.

The World Bank Board of Directors agreed today to advise the Board of Governors to authorize the transfer from the International Bank for Reconstruction and Development surplus the amount of $75 million to replenish the Trust Fund for West Bank and Gaza in which the World Bank has, since 1993, invested some $675 million.

Projects to support policy reform and development in West Bank and Gaza have contributed in the past to better targeting of assistance to poor people and expanding opportunities for young people in higher education. Others have improved public financial management and increased domestic tax collection.

Today’s $75 million replenishment will continue to target efforts to strengthen fiscal systems and improve public financial management. In addition, the funds will be used to improve the management of municipalities and finance a new regional waste-water program. Around a quarter of the funding— $20 million—represents extraordinary assistance, earmarked for projects to improve the quality and reliability of electricity provision, as well as as well as water and sanitation services to people in the Gaza Strip.

“Past spending out of the trust fund has seen notable results in some of the basics of service delivery,” said Mariam Sherman, Country Director for the West Bank and Gaza. “As sustainability is a central pillar of our aid strategy, the establishment of physical infrastructure is closely accompanied by the development of local institutions capable of managing it independently and efficiently. Our project portfolio is also designed to assist the Palestinian people in maintaining their remarkable human development achievements so we direct some aid to the most vulnerable segments of the population which are still feeling the effects of the instability of the previous decade.”

There are currently 14 active projects valued at $213 million in sectors ranging from education, energy to social development and protection. In addition, the World Bank administers the Palestinian Recovery and Development Plan Multi Donor Trust Fund which since its inception in March 2008 has disbursed $590 million in budget support.

The World Bank’s financial assistance is provided together with technical assistance and capacity building activities for the Palestinian Authority.

Contacts: In West Bank and Gaza: Mary Koussa, (972) 2-2366500, mkoussa@worldbank.org In Washington: Thoko Moyo, (202) 4588517, tmoyo@worldbank.orgFor more information on the World Bank Program in West Bank and Gaza, visit: www.worldbank.org/ps