March 04, 2019
A DAI-led project to finance a solar energy facility for a Gaza industrial park was selected for the 2019 World Bank President’s Award for Excellence. The $11.2 million financing package for the PRICO Solar Gaza Project was honored for overcoming risks presented by Gaza’s legal and operating environment to ensure the project’s financial sustainability. Once built, the facility will mark the largest solar array in the West Bank and Gaza and first privately financed infrastructure project in a decade in Gaza.
Solar-generated electricity produced by PRICO will power 32 factories and warehouses that comprise the Gaza Industrial Estate, which—like most of the West Bank and Gaza—relies heavily on Israeli imports to meet electricity needs. Chronic electricity shortages have caused Gaza factories to shut down operations, scale back output, or incur substantial additional expenses in operating private generators. Electricity generated by PRICO is projected to supply 80 percent of the power to the 50-hectare industrial park, enabling expanded production and the creation of approximately 800 new jobs in food, wood, metals, and other business sectors operating in the park.
PRICO is financing the 7-megawatt, 57,000-square-meter rooftop photovoltaic system. Loans and guarantees were collectively arranged by the International Finance Corporation, International Bank for Reconstruction and Development, Multilateral Investment Guarantee Agency, and loan guarantor Palestine Development and Investment Company, the majority owner of PRICO.
DAI implements the Finance for Jobs (F4J) program for the Palestinian Authority’s Ministry of Finance and Planning (MOFP). Funded by the World Bank, F4J conducted the financing due diligence on PRICO—including on its implementation capacity, procurement processes, and financial system—in accordance with the World Bank’s Maximizing Finance for Development approach of leveraging private sector funding and optimizing the use of scarce public resources. Additionally, the F4J team:
Prepared the case for public financing, including an assessment of market failures and rational for funding, and social-, economic-, and cost-benefit analyses by measuring the economic and social rates of return for the first time ever in the West Bank and Gaza Strip;
Updated the labor survey at the Gaza Industrial Estate; and
Prepared the investment proposal and $2 million equity grant for the investor.
F4J will monitor the project implementation, including procurement compliance, technical oversight, financial audits, and environmental impact monitoring, and report to the MOFP and World Bank. F4J will also monitor and report on the impact on employment. The PRICO solar project has mobilized with completion expected by the end of year.
F4J is a four-year series of projects to mobilize private investment in high potential sectors and generate job opportunities across the West Bank and Gaza. Led by Project Manager Mazen Asad, the F4J team designs, tests, and implements three innovative financial instruments in Palestine: