West Bank and Gaza Trust Fund
What is the West Bank and Gaza Trust Fund
The West Bank and Gaza Trust Fund was established in 1997 to encourage private sector investment and economic development in the West Bank and Gaza — a Fragility, Conflict and Violence affected (FCS) territory — through the offering of political risk insurance (PRI) to both local and foreign investors. The West Bank and Gaza Trust Fund is currently funded through contributions from Japan’s Ministry of Finance and the Palestinian Liberation Organization (PLO) through an IDA grant.
What does it do?
At present, the West Bank and Gaza is not a member of the International Monetary Fund, the World Bank, or MIGA, and is not eligible for the sources of financing normally available to these institutions’ member countries. To overcome this legal obstacle, the West Bank and Gaza Trust Fund, administered by MIGA, is used to issue political risk insurance to investors in the West Bank and Gaza.
What are its benefits?
Local and foreign investors operating in West Bank and Gaza benefit from MIGA coverage solely due to the West Bank and Gaza Trust Fund. The MIGA coverage, in turn, has enabled the crowding-in of private sector investment into the region. As of September 1, 2022, the West Bank and Gaza Trust Fund provided its donors a 1:3 contributions-to-guarantees issued ratio, reflecting high leverage despite the fragile context of the WB&G region.
What are its development impacts?
The West Bank and Gaza Trust Fund has supported the issuance of MIGA guarantees worth $44.96 million (gross) to date in the West Bank and Gaza, stimulating private business activity and attract foreign as well as local private investment in a variety of sectors, including manufacturing, agribusiness, and small-scale infrastructure. It has also succeeded in stimulating the local economy, generated employment opportunities, created tax revenues, and assisted in the transfer of modern technologies and business practices to firms in the West Bank and Gaza.
Apart from crowding in private investment, the projects supported by the West Bank and Gaza Trust Fund have also had the following development impacts since 2013:
- Total Direct Employment (number): 813, of which 151 are women
- Domestic Purchases: $8.27 million
- Payments to Government: $720,000