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The European Bank for Reconstruction and Development (EBRD) is enhancing Palestinian export and import activities by allocating a $2 million trade finance line to the Arab Islamic Bank (AIB).
Administered under the EBRD’s Trade Facilitation Programme (TFP), this finance line will facilitate the issuance of guarantees to confirming banks for pre-export and post-import financing and assist private companies with their trade finance operations.
This intervention is timely for the West Bank and Gaza, especially given the economic downturn triggered by the conflict in Gaza that began in October 2023. Recent data suggest that the regional economy declined by at least 6.4% by the end of 2023, influenced by job losses and heightened security tensions that have hindered both movement and business activities.
Through participation in the TFP and the acquisition of this trade line, AIB will access a global network encompassing over 100 issuing banks and 800 confirming banks, broadening its correspondent banking network and bolstering international business opportunities. AIB staff will also gain from a comprehensive range of seminars and training focused on trade finance best practices.
AIB stands as the principal Islamic Bank in the West Bank and Gaza, and operates as a subsidiary of the Bank of Palestine (BoP), the largest bank in the region and an EBRD client since 2020.
Mike Taylor, EBRD Director for Financial Institutions in the Southern and Eastern Mediterranean region, stated, “We are delighted to welcome the Arab Islamic Bank into our network. This trade finance limit is our first limit with an Islamic bank in West Bank and Gaza, and will not just support Palestinian exporters and importers but also provide opportunities for trade finance training at AIB.”
Hani Nasser, General Manager of AIB, commented, “The cooperation with the EBRD is an important milestone for AIB as it will enhance trade facilitation services provided for AIB’s clients, in addition to having access to banks around the world through the network of EBRD partners. It’s an opportunity for AIB to establish strong relationships with new correspondent banks. The benefits extend beyond commercial transactions, as the EBRD provides trade finance tools through training courses to AIB employees.”
The TFP, initiated in 1999, aims to promote international trade across the Bank’s regions by providing guarantees and short-term loans to selected banks and factoring companies.
Since initiating operations in the West Bank and Gaza in 2017, the EBRD has implemented 24 projects valued at a total of €118.7 million.
