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OPIC Approves Private Equity Funds to Invest in Palestine

2010-06-27

WASHINGTON, D.C. – On Tuesday, June 24, 2010, the Board of Directors of the Overseas Private Investment Corporation (OPIC) approved a total of $455 million in financing to support the establishment of five private equity investment funds targeting investments in companies in the Middle East and North Africa (MENA). The five funds combined are expected to put over $2 billion of investments to work in the MENA region.

The five funds approved were among 87 responses to OPIC’s call for proposals. Three of the five funds include Palestine as a potential investment target, with Siraj Palestine Fund I concentrating exclusively on investing the full amount of the fund’s target capitalization of $80 million in Palestinian companies.

The OPIC Board approved up to $30 million in financing of Siraj Palestine Fund I, which will invest in Palestinian start-ups, small and medium-sized enterprises (SMEs), and potentially in larger companies with growth potential. The fund will also invest in viable distressed Palestinian companies whose capital has been depleted mainly due to political turbulence.  The fund seeks to build a diversified portfolio of companies across different sectors, composed of various sizes of investments, and across all stages of development and other diversifying factors.  It will also facilitate technical assistance to its portfolio companies to improve the companies’ operations and enhance their growth opportunities.

OPIC selected as fund manager Siraj Fund Management Company, a Ramallah-based company owned by Massar International, another Palestinian company that manages a network of 15 subsidiaries operating in real estate development, financial services, and corporate business development.

The fund will focus on companies with the potential to become market leaders in Palestine or expand their operations internationally, primarily in the MENA region. Sectors of interest to the fund include information and communication technology services, agriculture, clean technology, healthcare, education, manufacturing and financial services.

The other two funds that will also target Palestine include Riyada Enterprise Development Growth Capital Fund and Accelerator Technology and Innovation Capital Partners.

The OPIC Board approved up to $150 million in financing in the Riyada fund, geared to invest in SMEs throughout the MENA region, particularly companies which stand to benefit from investment in technology. The fund will target Egypt, Turkey, Palestine, Jordan, Lebanon, Pakistan, Oman, Algeria and Morocco.  OPIC selected as fund manager Abraaj Capital Group to run this fund.

The Accelerator fund was also approved for up to $25 million, which will provide growth-stage financing to MENA companies in the digital content, internet services, mobile applications, mobile financial services, technology services and platforms, next generation media, entertainment and software development sectors. the fund will target Jordan, Lebanon, Palestine, Egypt, Morocco and Tunisia among other Arab and Islamic countries. OPIC selected as fund manager AcceleratorTech Capital Partners, which is owned by Accelerator Technology Holdings, a Jordan-based company.