VZCZCXRO5485
OO RUEHROV
DE RUEHJM #1575 2110700
ZNR UUUUU ZZH
O 300700Z JUL 07
FM AMCONSUL JERUSALEM
TO RUEHC/SECSTATE WASHDC IMMEDIATE 8523
INFO RUEHXK/ARAB ISRAELI COLLECTIVE PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RUEHBS/USEU BRUSSELS PRIORITY

UNCLAS JERUSALEM 001575 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
NEA FOR FRONT OFFICE; NEA/IPA FOR 
WILLIAMS/SHAMPAINE/BELGRADE; NSC FOR ABRAMS/WATERS; 
TREASURY FOR SZUBIN/LOEFFLER/NUGENT/HIRSON; PASS OPIC FOR 
DRUMHELLER/BEQUAI 
 
E.O. 12958: N/A 
TAGS: ECON EFIN EINV ETRD KWBG
SUBJECT: OPIC-BACKED LOAN GUARANTEE PROGRAM LAUNCHED 
 
¶1.  (SBU) Summary.  The Overseas Private Investment 
Corporation (OPIC), the Aspen Institute, and the Palestine 
Investment Fund (PIF) signed a loan guarantee agreement on 
July 25 that will leverage up to USD 228 million in loans to 
small and medium-size Palestinian enterprises (SMEs).  The 
agreement establishing the initiative, known as the Middle 
East Investment Initiative Program (MEII), was signed by OPIC 
President Robert Mosbacher on behalf of the U.S.  U/S Karen 
Hughes, who witnessed the signing with President Abbas (Abu 
Mazen), declared that the MEII is indicative of USG efforts 
to shore up the Palestinian economy and help stabilize the 
region.  Abbas remarked that he would welcome similar project 
launches on a weekly basis.  End Summary 
 
¶2.  (SBU) OPIC President and CEO Robert Mosbacher, Aspen 
Institute chairman Berl Bernhard, and PIF CEO Mohammed 
Mustafa signed a loan guarantee framework agreement July 25 
that will leverage up to USD 228 million in loans for 
Palestinian SMEs.  The signing ceremony took place at the 
Presidential Compound in Ramallah.  Abu Mazen, Under 
Secretary of State Hughes, Mosbacher, Bernhard, and Mustafa 
 
SIPDIS 
took turns praising the program.  Prime Minister Fayyad also 
witnessed the signing.  The Consul General and the Norwegian 
Special Envoy for the Middle East Svein Sevje also attended. 
 
Evidence of USG Commitment 
-------------------------- 
 
¶3.  (SBU) In her remarks, U/S Hughes noted that President 
Bush renewed the USG's commitment to the peace and security 
of the Palestinian people in his July 16 speech.  She said 
that President Bush and the American people know that "it is 
crucial to improve the living conditions and the economic 
opportunities for the Palestinian people."  She emphasized 
that the MEII embodies this commitment by providing 
much-needed loans to SMEs, many of them family-owned.  U/S 
Hughes noted that the program presents an opportunity for 
Palestinians, particularly small business owners, to set the 
course of Palestinian economic development.  Mosbacher said 
the MEII will infuse much needed investment funds into the 
Palestinian private sector, allowing even small business 
owners to use their own talents and energy to improve 
conditions for themselves and their families. 
 
¶4.  (SBU) Abu Mazen emphasized that the Palestinian people 
and economy are in real need of projects.  He praised the 
MEII and called on Palestinian banks to facilitate these 
loans as a means of boosting the Palestinian economy.  He 
expressed his hope that a new project will be signed every 
week.  The bulk of Abu Mazen's remarks, however, were devoted 
to condemning Hamas actions in Gaza.  He also cautioned 
against differentiating between the West Bank and Gaza. 
 
Program Details 
--------------- 
 
¶5.  (SBU)  The MEII consists of a USD 110 million guarantee 
from OPIC and a USD 50 million guarantee from the PIF.  The 
Norwegian government is providing USD 5 million over 5 years 
for operating costs and training.  The Aspen Institute has 
raised funds from American, European, and Arab donors to 
operate and manage the initiative.  The U.S. NGO CHF 
International will manage the program locally, working 
closely with participating banks. 
 
¶6.  (SBU)  By guaranteeing 70 percent of loan principal, the 
USD 160 million will be able to leverage up to USD 228 
million in credit.  The remaining 30 percent will be covered 
by the lending bank.  Loans will range from USD 10,000 to USD 
500,000.  A local advisory board for the MEII comprised of 
prominent members of the private sector held its inaugural 
meeting July 25, after the signing ceremony. 
WALLES