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Abraaj Capital sees profit in resilient Palestinian firms

2010-06-06

June 3 (Reuters) - Dubai-based private equity firm Abraaj Capital plans to invest in 20 to 25 small- and medium-sized (SME) Palestinian firms in the coming four years, its executive director said on Thursday. Tom Speechley said Abraaj was looking at sectors including agribusiness, healthcare, education and stone and marble. Abraaj Capital in January unveiled a $50 million fund focused on Palestinian SMEs and sponsored by the Palestine Investment Fund, the investment arm of the Western-backed Palestinian Authority. "It"s early days in Palestine and I accept that," Speechley said on the sidelines of an investment conference in Bethlehem. "We do believe there are good SMEs here and that we can invest profitably," he said. "There are challenges obviously but the economy is growing at 7 to 10 percent. The businesses here are very resilient," he added, anticipating the value of the projects in which Abraaj will invest from $500,000 to $8 million. Abraaj has previously said its dedicated SME investment-management platform, Riyada enterprise Development, would manage the fund. Palestinian policymakers say the economy of the West Bank, under Israeli occupation since 1967, grew by more than 7 percent last year due to a flow of foreign donor aid, relatively stable security conditions and Israel"s removal of some checkpoints. The economy of the Gaza Strip, however, has deteriorated due to an embargo enforced by Israel. The territory is governed by the Hamas Islamist group, which is hostile to Israel and listed as a terrorist group by Western states. Speechley was attending the second investment conference organized by the Palestinian Authority. The last such gathering, held in 2008, generated investment pledges of $1.4 billion, though not all of that has materialized.