Washington, D.C., April 14, 2008
—IFC, a member of the World Bank Group, is partnering with the U.S. Overseas Private Investment Corporation, the Palestine Investment Fund, and the Bank of Palestine on a landmark initiative in the West Bank and Gaza that aims to expand access to housing finance for low- and middle-income residents, address a severe housing shortage, and develop the residential housing sector and related industries.
The West Bank and Gaza needs 65,000 more homes today, with demand growing by 11,000 units a year and the housing supply in decline since 1999. The initiative will establish a new housing finance company that will use long-term funding of $500 million to help an estimated 30,000 people obtain home loans on affordable terms. This, in turn, will boost development of the housing sector.
OPIC will provide up to $250 million of the funding, with IFC, the Palestine Investment Fund, and the Bank of Palestine each contributing up to $75 million. Further funding will be provided by the Palestine Home Mortgage Corporation and the U.K. Department of International Development. The new housing finance company will originate affordable home loans in the West Bank and Gaza using this funding and other sources.
Lars Thunell, IFC Executive Vice President and CEO, said: "There is a great need for affordable housing in the West Bank and Gaza, and long-term financing can help meet this need. Housing finance allows families to build assets as well as homes. It also supports job creation and economic growth."
Robert Mosbacher, Jr., President and CEO of OPIC, said, “Mortgage finance that is both affordable and accessible is a vital engine for home ownership and economic growth. This program will expand mortgage lending to the people who need it most, and in the process provide hope to many people in the West Bank.”
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The housing program and mortgage finance company that we are launching will improve the lives of many families. This initiative will enable more people in the Palestinian working and middle classes to own quality homes. It will create tens of thousands of jobs for Palestinian workers and provide hundreds of local enterprises with business opportunities,” said Dr. Mohammad Mustafa, CEO of Palestine Investment Fund
IFC and the World Bank will also provide advisory services, with a focus on training for the financial sector, improvements in the laws and policies for housing finance, and assistance to financial institutions as they launch housing finance products and develop the market.
On his first official visit to the West Bank in February, IFC’s Thunell signed agreements with Al Rafah Microfinance Bank and the Capital Markets Authority to improve access to finance for entrepreneurs and small companies. IFC has been active in the West Bank and Gaza since 1996, investing in companies and providing advisory services to support micro, small, and medium enterprises. Despite constraints on the area’s investment climate, IFC is seeking opportunities to provide investment and advisory services in leasing and trade finance, as well as housing finance.
About IFC
IFC, a member of the World Bank Group, fosters sustainable economic growth in developing countries by financing private sector investment, mobilizing private capital in local and international financial markets, and providing advisory and risk mitigation services to businesses and governments. IFC’s vision is that poor people should have the opportunity to escape poverty and improve their lives. In FY07, IFC committed $8.2 billion and mobilized an additional $3.9 billion through syndications and structured finance for 299 investments in 69 developing countries. IFC also provided advisory services in 97 countries. For more information, visit
www.ifc.org
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