EBRD extends US$ 2 million trade line to the Arab Islamic Bank

The European Bank for Reconstruction and Development (EBRD) is boosting Palestinian export and import activities by providing a US$ 2million trade finance line to the Arab Islamic Bank (AIB). 

The trade finance line will be used to issue guarantees in favour of confirming banks for pre-export and post-import financing. This limit comes at a crucial time to help facilitate trade finance activities for private sector businesses in West Bank and Gaza, particularly after the war in Gaza which started in October 2023 and is also impacting the economy of the West Bank. Recent estimates indicate that the local economy contracted by at least 6.4 per cent at the end of 2023 due to employment losses and rising security tensions which affected mobility and business activity. 

The EBRD TFP programme was launched in 1999 to promote international trade between the economies in the Bank’s regions, in the form of guarantees and short-term loans to selected participating banks and factoring companies.

By joining the Trade Facilitation Programme (TFP), AIB will gain access to a community of more than 100 issuing banks and 800 confirming banks worldwide, expanding its correspondent banking network and its international business opportunities. AIB employees will be able to benefit from seminars and trainings covering knowledge and best practices of prudent banking in trade finance. 

AIB is the largest Islamic Bank in West Bank and Gaza (WB&G) and a subsidiary of the Bank of Palestine (BoP), the largest bank in WB&G and an EBRD client since 2020. 

Mike Taylor, the EBRD Director for Financial Institutions of the Southern and Eastern Mediterranean region, said: “We are delighted to welcome the Arab Islamic Bank into our network. This trade finance limit is our first limit with an Islamic bank in WB&G and will support Palestinian exporters and importers and provide opportunities for trade finance trainings at AIB.” 

Mr. Hani Nasser, the General Manager of AIB commented on the signing: “The cooperation with EBRD is an important milestone for AIB as it will enhance trade facilitation services provided for AIB’s clients, in addition to having access to worldwide banks through the network of EBRD partners- an opportunity for AIB to establish strong relationships with new correspondent banks. The accomplishment expands beyond commercial transactions, as EBRD provides trade finance tools through training courses to AIB employees.”

Since the start of its operations in the West Bank and Gaza in 2017, the EBRD has signed 24 projects worth a total of €118.7 million.