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Investment Landscape
• Financing of economic and development projects in Palestine is driven by institutions across three key sectors:
1. International donors play a vital financing role, providing substantive financial aid to support the Palestinian Authority’s budget, fund numerous humanitarian relief and social development projects.
2. Public sector financing capacity is weak and constrained by the PA’s longstanding budget deficits; the national sovereign wealth fund, the Palestine Investment Fund (PIF), drives investment in select Palestinian economic sectors.
3. Private sector financing is limited by a weak credit market, with a few conglomerate holding companies investing across a variety of sectors. Both private equity and venture capital funds are an emerging trend, providing growth capital for Palestinian start-ups as well as micro, small, and medium enterprises (MSMEs).
• Financing is channeled towards four broad priority sectors: Governance and institutional building; Economic development; Social protection and development; and Infrastructure. Of these sectors, infrastructure receives the least financing.
• Financing support is uneven across the project cycle, with a lack This lack of early-stage seed capital constrains development of higher-risk projects of seed capital for non-tech projects. that may be critical to economic development.