Private Sector Grant Facility
The Portland Trust recommends that a consortium of donors establish a Palestinian Private Sector Grant Facility (PSGF), specifically for substantial private sector projects that generate significant development benefits, including investment in Palestinian Industrial Zones. In light of pressure on aid budgets at a time of contraction in credit markets, the difficulty that larger projects have in securing finance, and the urgent need for sustainable growth and job creation in the Palestinian economy, we believe donors have a crucial new role to play.
The PSGF will boost the private sector's ability to attract finance by making available at the outset of a project a grant equivalent to 15% of the total investment. $100m of aid used in this way would attract close to $700m of investment from the private sector, with very significant impact on the Palestinian economy.
Several rounds of consultation have revealed strong support from international entities, the Palestinian private sector and the Palestinian Authority. An initial pipeline of projects is being developed with the help of international and local advisers, whilst the international law firm Norton Rose Group are advising on the structuring of the fund.
