The European Bank for Reconstruction and Development (EBRD) is boosting Palestinian export and import activities with a US$ 5 million trade finance limit to Bank of Palestine, the largest bank in the West Bank and Gaza.
The trade finance line will be used to issue guarantees in favour of confirming banks for pre-export and post-import financing.
The coronavirus pandemic has led to strong demand for trade financing as a way of keeping the import and export of vital goods going. Through its Trade Facilitation Programme (TFP), the EBRD played a crucial role in upholding trade and the programme achieved a record annual volume of over €3.3 billion in 2020.
By joining the TFP, the Bank of Palestine will gain access to a community of more than 100 issuing banks and 800 confirming banks worldwide, expanding its correspondent banking network and its international business opportunities. Joining the TFP will also create the opportunity to develop new products such as factoring, which will support small and medium-sized enterprises and intra-regional trade, and to trade in energy efficiency equipment and services.
The EBRD TFP was launched in 1999 to promote international trade between the economies in the Bank’s regions, in the form of guarantees and short-term loans to selected participating banks and factoring companies.
Bank of Palestine started issuing letters of credit in 2000 through international banks such as Deutsche Bank, Commerzbank, HSBC and Citibank. Then in 2002, it launched its International Trade Division throughout all branches in the West Bank and Gaza. It now has an annual volume in trade finance equivalent to US$ 70 million.
Since the start of its operations in the West Bank and Gaza in 2017, the EBRD has signed 14 projects for a total of US$ 61 million.