United Nations

World Bank

Since West Bank and Gaza (WB&G) is not a sovereign state, it cannot be a member country of the World Bank Group.  As such, it is not eligible for the sources of financing available to member countries. To overcome these legal/practical obstacles, the Bank’s Board of Governors approved a $50 million grant on November 11, 1993, to be transferred from IBRD surplus into a trust fund set up for this purpose - Trust Fund for Gaza and West Bank (TFGWB). Between 1993 and up until 2002 all WB&G funding was provided on credit terms.  Since 2002 all new projects are being approved on grant terms. To date, the TFGWB has been replenished seven times.

In addition, as WB&G is not a sovereign state, there is no formal CAS.  Instead, the Bank Group relies on interim strategies to guide its work.  The latest interim strategy for FY08-10 was discussed by the Board together with the last request for TFGWB replenishment (in the amount of $55 million) in April 2008.

The goal of the interim strategy -both financial and policy oriented- is to support the Palestinian Authority's three-year Palestinian Reform and Development Plan (PRDP).  Its overarching objective is Palestinian economic recovery, and the Bank Group's program is organized around four pillars, to: (i) improve governance and support fiscal reform; (ii) support human development in health, education, and social safety nets; (iii) support economic and private sector development; and (iv) support public infrastructure development.  The Bank will continue emphasizing policy reform and institutional development in all four areas, using analytical and advisory work and resources from the TFGWB, MIGA and IFC.

PRDP Multi-Donor Trust Fund (PRDP-TF)

The WB&G TF portfolio is well aligned with the main objectives of the strategy approved by the Board on April 22, 2008. In particular, it aims at supporting the Palestinian Recovery and Development Plan (PRDP). The European Union, the Nordic countries, and UK-DFID are the most relevant donors of the TF portfolio.

Trust Fund Portfolio Details

In April 2008, the PRDP TF was established between the Bank and the PA to provide budgetary support for the PRDP implementation.
As of June 2009, the PRDP TF has transferred a total US$297.2million. The release of funds from the PRDP TF is linked to stringent budget execution rules and a sound macroeconomic framework. Main donors are Australia, Finland, France, Norway and the UK, Poland, Canada, and Kuwait.

Ongoing Operations - Project details and objectives:

Solid Waste and Environmental Management Project (SWEMP): World Bank: US$9.5m. (100% West Bank): Objective: to implement an environmentally sound solid waste management system for Jenin District.  This has been pursued through the construction of a controlled sanitary landfill in Jenin District; rehabilitation/closure of uncontrolled dumps; improvement in solid waste management services in the district through the supply of equipment and the strengthening of management and operation capacities’ building institutional capacity in the newly created Joint Services Council  for regional SWM services; and strengthening the institutional and monitoring capacity of Environmental Quality Authority. To successfully complete the key project activities that have been delayed due to the prevailing socio-political circumstances, the project’s closing date was extended from June 30, 2008 to June 30, 2009. Closing date:  30 June 2009.

Social Safety Net Reform Project (SSNRP). World Bank: US$10m, plus US$10m additional financing approved in April 2008; and US$5m approved from the Food Price Crisis Response Trust Fund approved in November 2008. (60% Gaza & 40% West Bank): The project was formally restructured in May 2007. Objective is to mitigate the impact of the continued socio-economic crisis on a subset of the poorest and most vulnerable households. An additional objective is to strengthen the institutional capacity of Ministry of Social Affairs to manage cash transfer programs. This will be achieved by implementing a pilot incentive-based cash transfer mechanism with improved targeting modalities that would contribute to improving the living conditions of the beneficiaries. Closing Date: June 30, 2012.

North Gaza Emergency Sewage Treatment Project (NGEST). World Bank: US$7.8m; plus US$12m additional financing approved in April 2008. (100% Gaza): The project is the fourth in a series of Bank-funded water and sanitation projects since 1994. It consist of two parts:  Part A - addressing the immediate and impending health, environmental and safety hazards to the communities near the poorly-treated and rapidly growing sewage lake in the Beit Lahia area of North Gaza. And Part B - a long-term solution for the adequate treatment and disposal of wastewater in North Gaza, which entails the construction of a new wastewater treatment plant expected to be financed by various donors. Approximately 300,000 people living in North Gaza will benefit from this project. The project overall estimated cost is about US$ 63 million. Closing Date: June 30,2012.

Tertiary Education Project (TEP): World Bank: US$10m; plus US$5m additional financing approved in May 28, 2009. (30% Gaza & 70% West Bank): Objectives are to: (i) improve the regulatory environment for tertiary education management, relevance and quality assurance; (i) increase internal and external efficiency of the tertiary education system, as a first step towards seeking sustainability; and (iii) to create incentives and provide the basis for improvements in efficiency, quality and relevance of tertiary education institutions in order to meet the socioeconomic needs of the Palestinian population.  The project provides technical assistance on defining policies consistent with increasing the financial sustainability of the sector and improving the capacity to respond to labor market needs. Closing Date: December 31, 2009.

Gaza II Emergency Water Project (GEWP II): World Bank: US$20m plus US$5m additional financing approved in April 2008; and US$3m additional financing approved on May 28, 2009. (100% Gaza): Objective are to: (i) develop a sustainable institutional structure of the water and wastewater sector in Gaza by supporting the functional establishment of a Coastal Municipalities Water Utility, as well as by enhancing and deepening the involvement of the private sector through a three-year management contract; (ii) continue improving the water and sanitation services by rehabilitation, upgrading and expansion of existing systems and facilities; and (iii) strengthen the regulatory and institutional capacity of the Pal. Water Authority. Closing Date: January 31, 2010.

Second Emergency Municipal Services and Rehabilitation Project (EMSRP II): World Bank: US$10m; plus US$3m additional financing approved on May 28, 2009. The Netherlands: € 5m. AFD: €12m. (60% Gaza & 40% West Bank): Objective are to: (i) provide funding for infrastructure rehabilitation and maintenance to help mitigate further deterioration in the delivery of essential municipal services, and (ii) create temporary job opportunities at the local level through the launching of labor-intensive employment generation schemes.  Through the Municipal Development Lending Fund, the project would pilot innovative initiatives to improve municipal service cost recovery and leverage partnerships with local NGOs, to deliver services more effectively.  The total cost of the project is currently estimated at $40.2m. On-going discussions for funding with KFW and Sweden are likely to cover the balance. Closing date: June 30, 2009.

Third Palestinian NGO Project (PNGO III): World Bank: US$10m; plus US$3m additional financing approved on May 28, 2009; AFD: €6 m. (40% Gaza & 60% West Bank): Objective: to provide social services to those who are poor, vulnerable or affected by the deteriorating socioeconomic conditions by establishing an effective mechanism to improve the quality and sustainability of NGO social service delivery. The first two PNGO projects successfully built up Palestinian NGO capacity to carry out social service delivery. PNGOIII will support the transformation of the Project Management Organization, the implementing unit within the Welfare Association of the previous projects, into the NGO Development Center, an institution dedicated to grant-making and sector development. Closing Date: December 31, 2009.

Emergency Services Support Program III (ESSP III): World Bank:  US$10m; plus US$5m additional financing approved on May 28, 2009. (60% West Bank & 40% Gaza): Objective: to mitigate the deterioration of service delivery brought about by the inability of the Palestinian Authority to meet its non-salary recurrent costs. It finances the non-salary expenditures of the key social ministries and is based on the PA's recurrent expenditure program for these ministries. Closing Date:  December 31, 2009.

Village and Neighborhood Development Project (VNDP): World Bank: US$10m. (40% Gaza & 60% West Bank): Objective: to promote a coordinated development approach which builds the capacity of communities to plan for and manage development sources. The project will support small communities in planning local initiatives, prioritizing needs through an inclusive and participatory process. It will also provide small grants to support joint activities among several village councils for subprojects that are part of the local plan. This will provide incentives for small communities to work together and eventually amalgamate and become a municipality. Closing Date:  October 30, 2012.

Electric Utility Management Project (EUMP): World Bank: US$12m; plus US$2.5m additional financing approved on May 28, 2009. (7% Gaza & 93% West Bank): Objective: to reduce the fiscal burden of the sector on PA’s budgetary resources through interalia lower deductions from clearance revenues for arrears owed to IEC.  This will be possible through adoption of appropriate sectoral efficiency enhancement measures taken and the key performance indicators of the electricity distribution utilities that will include: (a) improved collection performance; (b) lower technical/non-technical losses; (c) reduction in payables to IEC on account of electricity purchase; and (d) consolidation and increase in number of consumers. Closing Date: June 30, 2012.

Southern West Bank Solid Waste Management: World Bank: US$12m approved on May 14, 2009: Objective: to improve solid waste disposal services for the communities and businesses of Palestinian municipalities and joint services councils in the Bethlehem and Hebron governorates through provision of an efficient socially acceptable and environmentally friendly mechanism, including (i) strengthening the joint services council administrative and technical capabilities for a cost-effective management of waste disposal services; (ii) improving the waste disposal services through provision of a sanitary landfill facility and related infrastructure; and (iii) carrying out a public awareness campaign for promoting waste minimization, resource recovery and cost recovery for financial viability.  Closing Date: Dec. 31, 2014.

PRDP- Development Policy Grant II (DPG II): World Bank: US$40m, approved on May 28, 2009: Objective: to support the PA as it implements the Palestinian Reform and Development Plan (PRDP). The PRDP DPG II focuses its support on two areas: (i) straightening the PA’s fiscal position; and (ii) improving public financial management. Approved on May 28, 2009, and pending effectiveness.