The European Investment Bank pledged today to make a EUR 5m "anchor" investment in the first venture capital fund to target investments in export-oriented IT companies being launched in the Palestinian territories. Once launched, the fund is expected to make a key contribution to the development of private business and the local high-technology and financial sectors. The EIB's commitment was announced at a signature ceremony in Ramallah supported by the Palestinian Prime Minister and attended by Dr. Hassan Abu Libdeh, Minister of National Economy, and Dr. Mashhour Abu Daqqa, Minister of Telecommunications and Information Technology.
Prime Minister of the Palestinian National Authority Salam Fayyad said: "Palestine is open for business. We support the Middle East Venture Capital Fund efforts to contribute to economic growth in Palestine and benefit from development of stronger business ties and shared experience with the outside world and thank the European Investment Bank for their trust in this project."
Philippe de Fontaine Vive, European Investment Bank Vice President responsible for Mediterranean partner countries said: "The EIB is pleased to support the Middle East Venture Capital Fund in its goal to unlock significant business opportunities through combining international industry experience and risk capital, with the untapped talent pool and entrepreneurial energy that exists in the Palestinian territories."
The Middle East Venture Capital Fund will support the development of high-growth, export-oriented IT and communications companies through equity investment in early stage ventures. At present the expansion of this sector is held back by limited access to venture finance and by limited access to international markets. The Fund will begin to operate once it receives additional commitments.
Development of the Information and Communication Technology sectors is a key priority for the Palestinian Territories as it is the only economic activity to have seen near continuous growth over the last decade. Software exports are not subject to the impacts of political uncertainty, such as obstacles to movement and access. The Middle East Venture Capital Fund will benefit from the highly skilled and well educated Palestinian labour force.
The Middle East Venture Capital Fund will further benefit from the international technology business experience, understanding of venture capital and contacts around the world and region of the fund's two managers. The Fund will contribute to the development of venture capital as a new form of finance for Palestinian firms.
The Fund managers hope to work closely with the Palestine ICT Incubator (PICTI) and other mainstays of the Palestinian ICT sector to spur development of an ecosystem that fosters the formation, financing, and growth of technology companies.
The European Investment Bank is supporting the Middle East Venture Capital Fund through the Facility for Euro-Mediterranean Investment and Partnership Trust Fund (FEMIP), enabling coordinated support for economic development in Mediterranean partner countries. FEMIP encourages the modernisation and opening-up of the Mediterranean partner countries' economies. It focuses its activities on two priority objectives: private sector development and the creation of an investment-friendly environment.
Notes for Editors:
The European Investment Bank is the bank of the European Union and provides long-term finance for capital projects promoting European economic objectives.
The Facility for Euro-Mediterranean Investment and Partnership is the principal financial partner between Europe and the Mediterranean, and the foremost investor in risk capital. Through it the European Investment Bank has committed over EUR 165 million to 31 investment funds throughout the region.
Previous investment in the West Bank and Gaza by the European Investment Bank has included support for Palestinian SMEs and improving the electricity supply network across the Palestinian territories.
The Middle East Venture Capital Fund will be managed by Saed Nashef and Yadin Kaufmann.
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