EU Launches $400 Million Funding Package for Palestinian Businesses

The financing programme is one element of the European Commission’s wider Multiannual and Comprehensive Programme for Palestinian Recovery and Resilience, which covers the period from 2025 to 2027.

A major financing programme aimed at supporting Palestinian businesses has officially moved into implementation, with nearly $400 million set to be channelled through local banks to help micro, small and medium-sized enterprises (MSMEs) cope with ongoing economic challenges.

The European Investment Bank (EIB) and the European Commission announced the launch of the initiative following the signing of financing agreements between the Palestine Monetary Authority (PMA) and five Palestinian banking institutions. Under the agreements, Bank of Palestine will receive $150 million, Quds Bank $100 million, Palestine Investment Bank $70 million, The National Bank $50 million and Cairo Amman Bank $25 million.

The funding forms part of a €400 million facility first announced in October 2025 and is designed to improve access to affordable finance for businesses operating under extremely difficult economic conditions. Officials say the programme will provide much-needed liquidity to Palestinian enterprises, helping businesses remain operational, protect jobs and strengthen economic resilience during a period of prolonged uncertainty.

Support extends beyond loans

Alongside the financing package, additional technical assistance will be provided to strengthen the wider business environment for Palestinian enterprises.

The programme includes the deployment of the remaining €2.1 million in technical assistance funding from a broader €3.5 million support package. Around €1.4 million has already been allocated to previous initiatives. The technical assistance component will support businesses directly while also helping financial institutions improve services and develop programmes aimed at strengthening the MSME sector.

By working through the Palestine Monetary Authority and local banking partners, the initiative seeks to ensure that financing reaches businesses across different sectors of the economy, including companies that may otherwise struggle to secure affordable credit. European Investment Bank Vice-President Gelsomina Vigliotti said access to finance remains critical for businesses trying to continue operations, invest and preserve livelihoods under difficult circumstances.

She noted that the financing package is intended to direct support to areas where it is needed most while strengthening the overall business ecosystem through complementary technical assistance.

Part of broader recovery and resilience strategy

The financing programme is one element of the European Commission's wider Multiannual and Comprehensive Programme for Palestinian Recovery and Resilience, which covers the period from 2025 to 2027. The broader initiative has a total value of up to €1.6 billion and includes approximately €620 million in grants to support the Palestinian Authority, along with around €576 million earmarked for recovery and resilience projects in the West Bank, East Jerusalem and Gaza when conditions permit.

Palestine Monetary Authority Deputy Governor Mohammad Manasrah described the package as an important step toward strengthening the Palestinian financial sector's ability to support businesses during a period of exceptional pressure. He said the financing will help companies continue operating, adapt to difficult circumstances and sustain economic activity across Palestine.

European Commission Acting Director-General for the Middle East, North Africa and Gulf, Michael Karnitschnig, said the initiative represents an investment not only in businesses but also in employment, resilience and future economic opportunities for Palestinians. The European Investment Bank has maintained a long-term presence in Palestine, providing approximately €1 billion in financing since 1995. It has also supported Palestinian small and medium-sized businesses through risk-sharing instruments worth an additional €120 million. Officials say the latest package continues those efforts by helping businesses access capital, maintain operations and contribute to economic stability during a challenging period for the Palestinian economy.