ANNUAL REPORT Annual Report Index
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ANNUAL REPORT Annual Report Index 11 About PIF Message from the 12 Governance President of the State of Palestine 04 14 Board of Directors 18 General Assembly Chairman’s Message 22 Investment Portfolios 06 56 Palestine for Development Foundation 60 Financial Statements Palestine Investment Fund 4 Annual Report 2016 5 The last 10 years bear witness to PIF’s re- markable growth and its role in building the foundations of an independent national econ- omy for the independent Palestinian state. In 2016, PIF delivered another year of stellar per- formance, which included laying the cornerstone for the Palestine Cement Plant, inaugurating the Jenin Power Plant, implementing youth employ- ment programs, as well as achieving remarkable progress in the fields of health, agriculture, small and medium enterprises, real estate and renewable energy, and others. PIF is a source of pride for all Palestinians, with its commitment to the highest levels of integrity, trans- parency and good governance. I cannot but express my sincere appreciation to PIF, represented by its Chairman, members of the Board of Directors and General Assembly, executive manage- ment and staff. I wish PIF continued success in its efforts to build the economy of an independent Palestinian state with Jerusalem as its capital. Yours, Mahmoud Abbas President of the State of Palestine Palestine Investment Fund 6 Annual Report 2016 7 Chairman’s Message Dr. Mohammad Mustafa Chairman of the Board The Palestinian economy remains stunted by the Israeli occupation and its unjust policies. Rampant settlement expansion, restricted access to our natural resources, and restricting the freedom of movement Al Bireh, Qalqilia and Tubas to construct solar power empowerment of JDECO as it is the largest operating of people and goods have left the Palestinian economy in a fragile state. generation plants to meet their energy needs. Other company in occupied Jerusalem, the capital of the future similar MoUs were signed with the operators of 25 independent Palestinian state. This shall strengthen Despite these challenges, the Palestinian pursuit of independence and freedom continues unabated across artesian wells in Tubas governorate for the same the city’s economy and contribute to job creation, in the diplomatic, political, institutional and economic tracks. purposes. The tenders for land-leveling works are accordance with PIF’s strategy. expected to be published soon, followed by tenders for the construction of the solar parks. Manufacturing and Agriculture, As Palestine’s sovereign wealth fund, PIF has Telecommunications (Paltel) with 10%, The Arab Bank relentlessly strove to build the foundations of an Group with 10%, Palestine Electric Company with 5%, As part of PIF’s efforts towards providing full turnkey pillars of our national economy energy solutions, starting from energy production to independent and thriving economy; a quest which the Arab Palestinian Investment Company (APIC) with In the construction industries sector, Sanad Construction distribution and infrastructure, PIF has signed a strategic underpins PIF’s long-term strategy and its investment 4% and a number of prominent investors including the Company laid the cornerstone for the Palestine Cement partnership agreement with the Jerusalem District plans. Bank of Palestine, Al-Quds Bank, Cairo Amman Bank, Plant. As the first Palestinian cement plant, , the project Electricity Company (JDECO). Under this agreement, PRICO and the National Insurance Company. will contribute to advancing Palestinian economic Ladies and Gentlemen, PIF acquired 10% of the company’s shares. The independence, through catalyzing a national cement The plant will operate on natural Palestinian gas that we agreement set a framework for strategic cooperation and industry and providing the local market with high quality It is our pleasure to present to you PIF’s hope to extract by utilizing our available national natural partnership between the two parties, such as exchange cement. The cement plant is expected to create 1500 accomplishments in 2016; accomplishments that resources. of technical and professional expertise, knowledge direct and indirect jobs. The plant will be built in two reflect the vision of the Board of Directors and the of solar power generation plants, cooperation in the PIF has signed a partnership agreement with the consecutive phases; the first is the construction of a guidance of President Mahmoud Abbas. Information Technology ( IT ) and Communications Palestinian government to develop the Rantis oil field. cement mill with a total investment of around 65 million sectors including the development of the company’s PIF’s strategy focuses on a number of economic This comes within a unified national endeavor and a US dollars, which is expected to become 310 million US holistic program to enhance the independence of the optical fiber networks next to electricity networks, objectives, including boosting Palestinian energy dollars upon completing phase two, and the construction energy sector in Palestine and reduce dependency on and collaboration in infrastructure development. The security, investing in productive sectors that can of the cement plant. Israel, including development of natural resources of gas significance of this strategic partnership lies in the create jobs, and reducing dependency on the Israeli and oil. economy. Agriculture, manufacturing, as well as the development of Jerusalem’s economy remain among It is expected that the Palestinian government revenues our top priorities. will account for more than 70% of the project revenues, through its share in production, royalty fees and taxes. Investment to boost energy security Realizing this project will increase the independence and Alongside the intertwined diplomatic, political, institutional and economic the reliance on local natural resources, as well as affirming In 2016, PIF laid the cornerstone of the first power Palestine’s sovereignty over its natural resources. tracks, PIF remains determined to yield results in a complex environment under generation plant in Jenin governorate. The plant is PIF has also begun the implementation of the “Noor expected to meet nearly 40 percent of the electricity occupation, fulfilling its objectives to develop a solid and independent national Palestine” solar energy investment program. The needs in Palestine, with an investment of around 600 program aims at establishing small solar power economy. million US dollars. generation plants with a total production capacity of The project is being developed by the Palestine Power 35 megawatts in the first phase and an investment of Generating Company; a partnership between PIF around 50 million US dollars. with 40.3%, Palestine Development and Investment PIF has signed MoUs with municipalities of Ramallah, Company (PADICO Holding) with 20%, Palestinian Palestine Investment Fund 8 Annual Report 2016 9 In the fourth quarter of 2016, Sanad completed its Initial Public Offering (IPO) of six million shares, representing The Palestine for Development Foundation will train 10% of the company’s overall shares, at a total value of PIF continues its restless efforts to around 200 teachers and target more than 500 students 14.1 million USdollars. The IPO stems from PIF’s belief in vocational centers through the “Introduction to the in the importance of partnerships with private investors, support and catalyze the economy Business World” program. The foundation will also train 25 individuals and companies, to promote economic 41.3 of Jerusalem. Those efforts include trainers on “How to select your business idea” and “How development. The IPO was extremely successful and Million USD to start your project”. Those trainers will be tasked to train developing the existing investment attracted small and large investors alike. more than 500 entrepreneurs who wish to start their own portfolio in the holy city focusing on businesses. In another endeavor in the manufacturing sector, the Sharakat Investment Fund has signed an investment tourism, real estate, small and medium The Palestine for Development Foundation continues agreement with Plastopal for plastic industries in Hebron. PIF’s pretax enterprises, in addition to employment, to work on the Economic Empowerment Program for Palestinian Refugees in Lebanon. The program expanded Plastopal produces plastic packages for dairy and food earnings for 2016 financing and tourism programs that to include new partners such the Arab Fund for Social and products. will be hopefully announced in 2017 Economic Development and Silatech organization. Around 2100 projects were financed until the end of 2016, with Reehan neighborhood, which is another iconic a total value of nearly 3.67 million US dollars, in various “PIF laid the cornerstone of the first power generation PIF project. Through Aswaq Company for sectors, benefiting around 12,000 refugees. plan in Jenin. The plant will meet nearly 40 percent of Investment Portfolios, PIF has increased its the electricity needs in Palestine, with an investment of investment in the Arab Specialized Complex Company (Parent-company of the Specialized around 600 million US dollars.” Ladies and Gentlemen, Arab Hospital in Nablus city and Istishari needs of the labor market, and be positive agents In agriculture, Sharakat has steadily progressed towards PIF continues to improve its performance through good Hospital), to around 20% during 2016. PIF is within their communities. Those goals will be achieved the development of