The European Bank for Reconstruction and Development (EBRD) has expanded a trade finance line provided to Palestinian lender Arab Islamic Bank, bringing the facility to US$10mn in total.
Arab Islamic Bank, a subsidiary of Bank of Palestine and the largest Islamic lender in the West Bank and Gaza, joined the EBRD’s Trade Facilitation Programme in 2023 with an initial limit of US$2mn, which was later increased to US$5mn.
The bank has been “actively using” the facility to finance imports of essential goods, including food and medical equipment, but institutions in the West Bank have continued to face “constrained access to international banking services”, the EBRD said.
Since joining the programme, Arab Islamic Bank has gained access to a network of over 100 issuing banks and 800 confirming banks, it added.
The expanded limit is expected to help grow trade flows between the West Bank and international markets, targeting both importers and exporters.
“The bank’s support highlights Arab Islamic Bank’s vital role in the Palestinian market and underscores the EBRD’s continued commitment to strengthening the local financial sector,” the London-headquartered multilateral bank said.
The EBRD has approved 38 projects in the West Bank and Gaza since 2017, investing a total of nearly €200mn.
In September last year it unveiled a US$7mn financing package for The National Bank, based in the West Bank, comprising a US$2mn trade finance limit extension and an EU-funded green loan.
The previous year, the EBRD expanded Quds Bank’s trade finance line to US$15mn, enabling imports of food and agricultural commodities, industrial equipment and medical supplies during a period of turmoil for the war-hit Palestinian economy.
