The Palestine Investment Fund (PIF) signed a $20 million loan agreement with the Arab Bank to finance the construction of three solar parks in Palestine.
The agreement was carried out through Massader, PIF’s impact arm for energy, infrastructure, and natural resources. The three solar parks are spread across Palestine: the first, in Jericho, will generate 7.5 MW; the second, in Tubas, will generate 9 MW; and the third, in Jenin, will generate 5 MW.
The agreement, part of Massader and the Arab Bank’s ongoing cooperation on green energy, is the largest solar finance loan to date in Palestine. It represents yet another tangible step in Massader’s Noor Palestine program, which seeks to build 200 MW of green power capacity by 2026 through a mix of solar parks and solar panels on the rooftops of public schools, institutions, and commercial and residential buildings. The Arab Bank’s participation in the Noor Palestine program is an important step in increasing local bank and institutional participation in green power and solar projects that help to boost Palestine’s energy security.
PIF Chairman Dr. Mohammad Mustafa stressed the agreement’s importance for the development of Palestine’s energy sector. “We are proud to sign this agreement with the Arab Bank. Our objectives as an impact investment organization and a banking institution often cross. The Arab Bank’s contribution will accelerate Noor Palestine’s implementation and encourage other banks and financial institutions to support green energy development in Palestine.”
Dr. Mustafa went on to explain that the Noor Palestine program is part of a broader effort to strengthen Palestine’s energy security by reducing its reliance on imported electricity. “Alongside the three solar parks in Jericho, Tubas, and Jenin, we have initiated a program which will install solar energy systems on the rooftops of residential, public, and commercial buildings.
Towards that end, we recently signed an agreement with the Ministry of Education and Higher Education to install solar panels on the rooftops of 500 public schools. Alongside these solar initiatives, PIF is investing in power generation, such as through the development of the Jenin Power Plant, which will boast a production capacity of 450 MW. We anticipate that, after these projects are implemented collectively, imported electricity in Palestine will decrease to less than 40% – a significant achievement for a country which currently imports over 90% of its electricity.”
For his part, Mr. Jamal Hourani, Director of the Palestine Region for the Arab Bank, expressed his pleasure in signing the agreement with PIF and Massader and strengthening their strategic cooperation in order to strengthen the renewables sector in Palestine. “The Arab Bank is particularly interested in renewable energy. It has a long history of financing environmentally friendly projects in the region.”
Hourani also expressed his pleasure to sign the largest green power financing agreement in Palestine’s history, stressing this sector’s importance for the local economy.
He added that the Arab Bank has the ability, competence, and solvency to finance major energy projects. The Arab Bank also finances small and medium-sized enterprises, particularly those related to renewable energy, in order to improve the investment climate and achieve economic growth and social stability in the region.
Azem Bishara, CEO of Massader, explained that “the first of the solar parks is expected to be operational in 2018, and is expected to save users up to 50% on their electricity bills over the next 25 years.” Bishara added that the parks will help create jobs and catalyze the renewable energy sector’s development.
“Civil and engineering work for the construction of the parks in Tubas and Jericho has been completed,” Bishara said. “Agreements to connect the parks to electricity distribution networks will be established through a local company as well as an international contractor specializing in social power parks.
The local company and international contractor will be selected through a competitive tender process, in full coordination with the Palestinian Energy Authority and local electricity distribution companies.”