PIF: an­other mile­stone to­wards eco­nomic in­de­pen­dence

Pales­tine In­vest­ment Fund ( PIF) pro­vides strate­gic lead­er­ship and fi­nan­cial sup­port for cru­cial de­vel­op­ments

Middle East Business (English) - - FRONT PAGE -

PIF's goal has al­ways been to achieve a strong, self-re­liant econ­omy and this re­mains the main mo­ti­va­tion and ba­sis be­hind its strate­gies and plans. De­scribed by Pales­tinian Pres­i­dent, Mah­moud Ab­bas, in its forth­com­ing an­nual re­port as "em­body­ing the high­est lev­els of in­tegrity, trans­parency and good gov­er­nance", PIF has emerged as one of Pales­tine's lead­ing na­tional in­sti­tu­tions, bring­ing pride to Pales­tini­ans and its sup­port­ers across the globe.

PIF re­cently cel­e­brated its var­i­ous achieve­ments by giv­ing in­vestors a glimpse of how bright the fu­ture could be. Dur­ing the year, projects were launched to the value of $1.3 bil­lion. Sig­nif­i­cant mo­ments have in­cluded the lay­ing of the cor­ner­stone for the Pales­tine Ce­ment Fac­tory, the in­au­gu­ra­tion of Jenin's power plant, the on­go­ing cre­ation of youth em­ploy­ment pro­grammes - in­clud­ing the newly launched Ibda pro­gramme - and con­tin­u­ing sup­port for health, agri­cul­ture, small and medium en­ter­prises, real es­tate and re­new­able en­ergy projects across the coun­try. Ac­cord­ing to Dr. Mo­ham­mad Mustafa, Chair­man of the Board at PIF, the last year has given his fel­low board mem­bers and in­vestors rea­son to be thank­ful: “In line with our an­nounced strate­gies, PIF has suc­ceeded in mul­ti­ple sec­tors dur­ing this past fi­nan­cial year. These strate­gies in­clude in­vest­ing in our eco­nomic in­fra­struc­ture, achiev­ing the high­est pos­si­ble de­gree of en­ergy se­cu­rity, and in­vest­ing in pro­duc­tive sec­tors that can create jobs, in­crease growth rates and de­crease de­pen­dency on the Is­raeli econ­omy. Agri­cul­ture, man­u­fac­tur­ing, as well as the de­vel­op­ment of Jerusalem’s econ­omy re­main among our top pri­or­i­ties.”

Re­al­is­ing en­ergy se­cu­rity

PIF has crowned its achieve­ment in the past year by lay­ing the cor­ner­stone of the first power gen­er­a­tion plant in Jenin gov­er­norate. The plant will serve nearly 40% of the elec­tric­ity needs of Pales­tine, with a to­tal in­vest­ment of around $600 mil­lion. Dr. Mustafa com­mented: “The project is be­ing de­vel­oped by the Pales­tine Power Gen­er­a­tion Com­pany, with con­tri­bu­tions by lead­ing Pales­tinian in­vestors. The plant will op­er­ate on nat­u­ral Pales­tinian gas that we hope to ex­tract by us­ing our avail­able na­tional nat­u­ral re­sources.” In­te­grat­ing the use of both tra­di­tional and al­ter­na­tive en­ergy sources, PIF has also started the “Noor Pales­tine” so­lar en­ergy in­vest­ment pro­gramme. Its aim is to es­tab­lish small so­lar power gen­er­a­tion plants with a to­tal pro­duc­tion ca­pac­ity of 35 megawatts in the first phase at an in­vest­ment of around $50 mil­lion. To achieve this, PIF has signed mem­o­randa of un­der­stand­ing (MoUs) with sev­eral mu­nic­i­pal­i­ties to con­struct so­lar power gen­er­a­tion plants. In ad­di­tion, sim­i­lar MoUs were signed with the op­er­a­tors of 25 arte­sian wells in Tubas gov­er­norate for the same pur­poses.

Pales­tine's first ce­ment fac­tory

Sanad Con­struc­tion Com­pany, one of PIF's sub­sidiary com­pa­nies, laid the cor­ner­stone for the Pales­tine Ce­ment Fac­tory in Beth­le­hem. Once built, the fac­tory will con­tribute to ad­vanc­ing state sovereignty and eco­nomic in­de­pen­dence. With the cre­ation of a na­tional ce­ment in­dus­try, the lo­cal mar­ket will have ac­cess to high qual­ity ce­ment, and 1,500 di­rect and in­di­rect jobs. Dr. Mustafa said that Sanad Con­struc­tion Com­pany com­pleted its Ini­tial Pub­lic Of­fer­ing (IPO) of six mil­lion shares at the end of 2016. The IPO of­fered 10% of the com­pany’s over­all shares for sale, with a to­tal value of $14.1 mil­lion. The IPO was ex­tremely suc­cess­ful, at­tract­ing both small and large in­vestors, and arose from PIF’s be­lief in part­ner­ing with the pub­lic. It is also a per­fect ex­am­ple of how the com­mu­nal ap­proach to eco­nomic de­vel­op­ment works.

Boost­ing health­care

In the health­care sec­tor, PIF has in­creased its in­vest­ment in the Arab Spe­cial­ized Com­plex Com­pany (mother com­pany of Spe­cial­ized Arab Hos­pi­tal in Nablus city and Istishari Hos­pi­tal) to around 20% dur­ing 2016.

Tourism sec­tor: promis­ing op­por­tu­ni­ties

Based on the Board of Di­rec­tor's firm be­lief in PIF’s role in de­vel­op­ing and nur­tur­ing promis­ing eco­nomic sec­tors through di­rect in­vest­ment, PIF took a de­ci­sion to form a new spe­cial­ist in­vest­ment port­fo­lio in the hos­pi­tal­ity and tourism sec­tor, car­ry­ing the an­cient Canaan­ite name of Jerusalem, Yabous. PIF has in­creased its in­vest­ment in the Arab Ho­tels Com­pany, owner of the Ramallah Moven­pick Ho­tel, to reach 54%, adding it to PIF’s other in­vest­ments in this sec­tor such as Grand Park Ho­tels in Ramallah and Beth­le­hem, the Jacir Palace, Beth­le­hem's Con­ven­tion Palace, and Ibis Ho­tel in Jerusalem, among oth­ers.

Pales­tine for De­vel­op­ment Foun­da­tion pro­vides sus­tain­able so­cial in­vest­ment

PIF's cor­po­rate so­cial re­spon­si­bil­ity is clear to see. Pales­tine for De­vel­op­ment Foun­da­tion aims at de­vel­op­ing the skills and ca­pac­i­ties of in­di­vid­u­als by mak­ing it eas­ier to ac­cess the labour mar­ket, and to act as pos­i­tive agents within their com­mu­ni­ties. Those goals will be achieved through var­i­ous pro­grammes fos­ter­ing the cul­ture of en­trepreneur­ship, and draw­ing upon a knowl­edge-based econ­omy that leads to de­vel­op­ing a na­tional econ­omy based on in­no­va­tion. The “Ibda” [ Start] pro­gramme for youth em­ploy­ment com­bines PIF’s ex­per­tise in fi­nance and pro­vides sup­port for en­tre­pre­neur­ial projects that in­cludes train­ing. The pro­gramme pro­vides ac­cess to fi­nance for youth start-ups and the ex­pan­sion of ex­ist­ing busi­nesses, of­fer­ing loans at at­trac­tive rates. This will hope­fully lead to job cre­ation and en­cour­age en­trepreneur­ship. A $ 30 mil­lion loan by the Arab Fund for Eco­nomic and So­cial De­vel­op­ment helped Ibda get off the ground, which in turn has been sup­ported by an agree­ment with the In­ter­na­tional Labour Or­ga­ni­za­tion and the Pales­tinian Min­istry of Ed­u­ca­tion to pro­vide the re­quired train­ing and ca­pac­ity build­ing schemes for young peo­ple. This will open up the hori­zons and in­crease the po­ten­tial of the young peo­ple sup­ported by the pro­gramme. Pales­tine for De­vel­op­ment Foun­da­tion con­tin­ues to work on the Eco­nomic Em­pow­er­ment Pro­gramme for Pales­tinian Refugees in Lebanon. This pro­gramme has been ex­panded to in­clude new part­ners such as the Arab Fund for So­cial and Eco­nomic De­vel­op­ment, and the Si­lat­ech or­gan­i­sa­tion. Around 2,100 projects across var­i­ous sec­tors have been fi­nanced so far, with a to­tal value of nearly $ 3.67 mil­lion. PIF is com­mit­ted to sup­port­ing fel­low Pales­tini­ans in the re­gion who were af­fected by the Nakba and who are un­able to re­turn to their right­ful homes; PIF is there­fore de­lighted that this eco­nomic em­pow­er­ment pro­gramme in Lebanon has di­rectly ben­e­fit­ted around 12,000 Pales­tinian refugees.

The fu­ture is promis­ing

As for PIF's fi­nan­cial achieve­ments, it is note­wor­thy that dur­ing the past 13 years it has changed from sig­nif­i­cant in­vest­ment in over­seas projects, to in­vest­ing in Pales­tini­ans and projects based Pales­tine. In 2003, the split be­tween lo­cal and for­eign in­vest­ments was 20% lo­cal, 80% for­eign. In 2016, this had be­come 93% lo­cal, 7% for­eign. By the end of 2016, to­tal as­sets stood at $856.2 mil­lion, with 7% growth com­pared to 2015. Prof­its stood at $41.3 mil­lion gross/pre-tax prof­its, $37.3 mil­lion net.

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