OPIC Completes Financing for First Private Equity Fund Investing in Palestinian Companies
May 22, 2012
WASHINGTON, D.C. – The Overseas Private Investment Corporation (OPIC), the U.S. Government’s development finance institution, concluded an agreement providing $30 million in financing to the first private equity fund designed to invest in Palestinian companies. The fund will inject much-needed capital into small business enterprises across a variety of sectors of the Palestinian economy.
The Siraj Palestine Fund I was one of five funds approved by OPIC’s Board of Directors in June 2010 in response to an announcement by President Obama that the United States would launch funds to support technological development in Muslim-majority countries. The fund had an initial target capitalization of $80 million, but ultimately raised $90 million, including the OPIC financing.
The fund is designed to invest in start-ups and small and medium-sized enterprises in the Palestinian Territories, with a focus on companies with the potential to become market leaders in the Territories or expand their operations internationally, primarily in the Middle East and North Africa. OPIC selected as fund manager Siraj Fund Management Company, a Ramallah-based company owned by Massar International.
Siraj Palestine Fund I has already invested in four companies – a gas distribution company endeavoring to become a market leader in liquefied petroleum gas distribution; a logistics and distribution services company; a start-up that specializes in the production and sale of dates; and an engineering firm that provides architectural design, supervision and project management services. In addition to these four initial investments, five more were approved in April of 2012 while many more promising deals are in the pipeline.
“A viable private equity sector and small business financing infrastructure are two telltale developments in the growth of any emerging market. The fact that Siraj Palestine Fund I contributes to both is an outstanding feature of this investment fund,” said OPIC President and CEO Elizabeth Littlefield. “The Siraj Palestine Fund I will help to unleash the potential of Palestinian businesses, while promoting technological advancements and sustainable development – all goals of President Obama’s announcement.”
Massar International Chairman and fund General Partner Bashar Masri stated, “OPIC’s much-needed support of the Siraj Palestine Fund I comes at a crucial juncture for the Palestinian economy. Access to capital for infrastructure expansion and operational upgrades is the missing link for dozens of viable Palestinian companies. Without it, they cannot meet domestic demand, innovate or compete successfully in the international marketplace. Strengthening key industry players across multiple sectors will ultimately make the entire Palestinian economy more robust.”
The signing of the financing agreement served to open an OPIC meeting of general partners managing OPIC-supported private equity investment funds, hosted by the agency’s Investment Funds Department.
OPIC is the U.S. Government’s development finance institution. It mobilizes private capital to help solve critical development challenges and in doing so, advances U.S. foreign policy. Because OPIC works with the U.S. private sector, it helps U.S. businesses gain footholds in emerging markets catalyzing revenues, jobs and growth opportunities both at home and abroad. OPIC achieves its mission by providing investors with financing, guarantees, political risk insurance, and support for private equity investment funds.
Established as an agency of the U.S. Government in 1971, OPIC operates on a self-sustaining basis at no net cost to American taxpayers. OPIC services are available for new and expanding business enterprises in more than 150 countries worldwide. To date, OPIC has supported more than $200 billion of investment in over 4,000 projects, generated an estimated $75 billion in U.S. exports and supported more than 276,000 American jobs.