JEDDAH, May 13, 2023 – The Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) is partnering with the Multilateral Investment Guarantee Agency of the World Bank Group (MIGA) as administrator for the West Bank and Gaza Investment Trust Fund (WBGTF),  to cover foreign investments into a leading Dates Farm Project in the West Bank, Palestine.

The guarantees, enabled by the WBGTF, were issued to Palestine Development and Investment Company, Ltd. (PADICO) of Liberia ($10.38 million), Siraj Fund 1 ($4.05 million), and Siraj Fund Management Company ($2.18 million). ICIEC is providing risk participation (akin to reinsurance) for the guarantee that is being issued to PADICO.

The guarantees will cover these investors’ equity investments in Nakheel Palestine for Agricultural Investment against the risks of expropriation and war and civil disturbance, including temporary loss of income, for a period of up to 5.5 years. Nakheel specializes in the production and sale of Medjool and Barhi dates.

The Nakheel project includes seven farms, a packaging facility for post-harvest handling of dates, a sorting and grading house, a cold storage facility, and a rooftop solar power plant – all located in the West Bank, Palestine.

This is the first project in Palestine that ICIEC has insured, a historic accomplishment made possible by its risk-sharing arrangement with MIGA as the WBGTF’s administrator. Additionally, it is the first time MIGA has acquired reinsurance on a WBGTF-funded project.

“We are genuinely pleased to secure our support for investments in Palestine for the first time, and we appreciate our partnership with MIGA on this landmark risk-sharing agreement. ICIEC intervention in this agriculture project marks another milestone of its contribution to the Food Security Response Program of the IsDB Group, knowing that the project is also environment-friendly, serving sustainable development in Palestine”. “The risk-sharing agreement with MIGA is an example of how dedicated we are to fostering partnerships that advance sustainable development”, remarked Oussama Kaissi, CEO of ICIEC.

MIGA and ICIEC support is expected to increase the development impact of the Nakheel project in the West Bank in terms of employment, earnings, and taxes paid. The Nakheel dates project is a critical employer in an economy hard-hit by unemployment and poverty, where most of the population earns its living from agriculture. In 2021 Nakheel employed 74 permanent and 741 temporary employees, of whom 30 percent were women and 60 percent came from low-income families. The project also indirectly contributes to the livelihoods of several hundred people throughout the operation’s value chain – including independent producers from which it buys part of its production as well as distributors of its products.

In addition, the project is aligned with the Paris Agreement, delivering both climate mitigation and adaptation through nearly 1,300 solar panels that generate 30 percent of its total electricity needs.

“MIGA is delighted to work with ICIEC to support a major agricultural firm and employer in the West Bank,” said Hiroshi Matano, Executive Vice President of MIGA. “Fortunately, this partnership was made possible as the West Bank and Gaza Trust Fund allows MIGA to administer funds to cover local investments in these economies, which could be a model for future work in other regions.”

Because the West Bank and Gaza is not a member of the World Bank or MIGA, the WBGTF was established in 1997 to encourage private sector investment and economic development in this economy, one that has long been affected by fragility, conflict, and violence. The fund allows MIGA to offer political risk insurance to both local and foreign investors, and MIGA administers the fund on behalf of its sponsors, the government of Japan and the Palestinian Authority. However, Palestine is a member of ICIEC.

Over more than two decades, the trust fund has stimulated private business activity and attracted both foreign and local private investment to multiple sectors in both the West Bank and Gaza in Palestine, including manufacturing, agribusiness, and infrastructure projects. Since 2013, projects supported by the trust fund have supported 813 local jobs, 151 of them for women, and have driven $8.27 million in domestic purchases and more than $700,000 in government payments.

A vibrant and resilient private sector is critical to development, increased prosperity, and poverty elimination even in fragile and conflict-affected situations, so risk mitigation tools like those provided by MIGA – which can enable private investment that otherwise wouldn’t occur – are vital in these challenging contexts.