Ramallah, West Bank, February 11, 2020 — IFC, a member of the World Bank Group, and Massader, a company established by the Palestine Investment Fund (PIF), signed a loan agreement today to finance the construction of hundreds of rooftop solar power panels across the West Bank—a first-of-its kind project designed to enhance the renewable energy sector and address chronic power shortages and blackouts by harnessing a domestically available source of energy.
The package includes an $8.1 million loan from IFC and $8.1 million in financing from the Finland-IFC Blended Finance for Climate Program and the Dutch MENA Private Sector Development Program. IFC will also be providing a local currency loan to Massader to develop energy and infrastructure projects in the Palestinian territories. The World Bank will provide a grant of up to $2 million from the Investment Co-Financing Facility.
The financing will help Massader build small solar installations on the roofs of approximately 500 public schools to power more than 16,000 houses across the West Bank. In a novel arrangement, the schools will receive free electricity and, in some cases, cash payments for hosting the installations. The majority of the electricity generated from the solar panels will be fed into local distribution systems at a competitive tariff, providing clean, reliable power for residents and businesses.
“One of the main challenges facing the energy sector in the West Bank and Gaza is the shortage of electricity and local generation capacity,” said Azem Bishara, CEO of Massader. “By developing 35 MW of distributed solar systems, we will enhance the power supply through sustainable sources, create energy savings for the education system, which can free budget for schools’ improvement, and provide electricity to the grid at competitive tariffs thus lowering the overall cost of electricity and contributing to economic and job growth”.
IFC’s role in structuring the project included building local capacity by developing key project documents such as the power purchasing agreement and construction and operating contracts. This is expected to help the future development of more decentralized, low-cost private sector projects with sound financial structuring.
"There is a pressing need to create more economic opportunities in the West Bank and Gaza," said Linda Munyengeterwa, IFC’s Regional Industry Director for Infrastructure in MENA and Africa. "This process needs to begin with the restoration of basic infrastructure services, which will make it easier for businesses to function and enable the entrepreneurial spirit of Palestinians."
Once up and running, the panels will help prevent the release of 30,000 tonnes of greenhouse gas emissions a year. The project will also help develop the electricity industry and provide electricity at a lower cost than imported electricity, which currently accounts for over 90 percent of power consumed in the West Bank.
About IFC
IFC—a sister organization of the World Bank and member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work with more than 2,000 businesses worldwide, using our capital, expertise, and influence to create markets and opportunities where they are needed most. In fiscal year 2019, we delivered more than $19 billion in long-term financing for developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org . For more information on IFC’s Blended Finance, including Enhanced Principles for Blended Concessional Finance in Private Sector Projects, visit www.ifc.org/blendedfinance.For more information on IFC’s work in infrastructure, visit: www.ifc.org/infrastructure .
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About Massader
Massader invests in and leads large-scale strategic projects aimed at developing Palestine’s natural resources and infrastructure. Established in 2015, Massader is a fully-owned subsidiary of the Palestine Investment Fund and is currently leading PIF’s investments in natural resources and infrastructure development projects in Palestine such as Gaza Marine natural gas field, West Bank oil field, Jenin power plant and the Noor Palestine Solar Program. In doing so, Massader endeavors to contribute to Palestine’s energy security and independence, facilitate investments large scale projects, create sustainable employment opportunities, and catalyze economic growth, all with the aim of creating a firm foundation to unlock the potential of the Palestinian economy.
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