VZCZCXRO7806
PP RUEHROV
DE RUEHJM #1362 2101523
ZNR UUUUU ZZH
P 281523Z JUL 08
FM AMCONSUL JERUSALEM
TO RUEHC/SECSTATE WASHDC PRIORITY 2297
INFO RUEHXK/ARAB ISRAELI COLLECTIVE PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY

UNCLAS JERUSALEM 001362 
 
SIPDIS 
 
NEA/IPA FOR GOLDBERGER/SACHAR; EEB/IFD/OIA FOR CULLINANE; R 
FOR MCDANIEL; TREASURY FOR ROSE; DEPT PLEASE PASS TO OPIC 
FOR ROBERT DRUMHELLER 
 
E.O. 12958: N/A 
TAGS: ECON EFIN KWBG
SUBJECT: UPDATE ON OPIC MORTGAGE FINANCE FACILITY 
 
REF: JERUSALEM 350 
 
¶1. (U) Summary: Representatives of the Overseas Private 
Investment Corporation (OPIC) visited Jerusalem and Ramallah 
July 18-23 to further OPIC,s affordable mortgage finance 
initiative, launched by PA President Abbas and OPIC CEO 
Mosbacher on April 14.  OPIC VP Drumheller discussed timing 
and implementation of the program with PA and Palestinian 
bank officials, with the goal of operationalizing the program 
by early 2009.  OPIC also discussed the feasibility of a 
project in the health sector with the PA Minister of Health 
and followed up on a rental apartment project under 
development in conjunction with the Anglican Church.  End 
summary. 
 
Housing and Mortgage Facility 
----------------------------- 
 
¶2. (U) Following up on the April 14, 2008 announcement of a 
500 million dollar mortgage finance facility, OPIC Vice 
President Robert Drumheller and Investment Analyst Maria 
Goravanchi visited Ramallah and Jerusalem July 18-23 to 
review the status of the project with its partners, the 
International Finance Corporation (IFC), the Palestine 
Investment Fund (PIF), Bank of Palestine and the UK's DFID. 
The program is designed to provide long-term housing loans to 
low- and middle- income Palestinians through the Affordable 
Mortgage and Loan Corporation (AMAL).  AMAL will work with a 
select group of local financial institutions, who will 
originate and service the loans, and serve as the public face 
to the customers.  Discussions with six Palestinian banks are 
ongoing regarding fees, risk sharing agreements, and 
reporting requirements.  Presently the Bank of Palestine, 
Cairo Amman Bank, and Arab Islamic bank seem the most 
interested and able to participate in this project. 
 
¶3. (U) The program is designed to become operational in early 
2009, in conjunction with large housing projects undertaken 
by PIF and Bayti Real Estate Development -- projects that 
would likely flounder in the absence of affordable mortgages 
for low-income buyers (reftel).  The Bayti development 
(Rawabi) was the signature project of the Palestine 
Investment Conference held in Bethlehem in May.  Bayti's CEO, 
Bashar al-Masri, has repeatedly stressed to ConGenOffs that 
his project will not succeed absent affordable mortgages for 
Palestinians. 
 
Potential Projects 
------------------ 
 
¶4. (U) Separately, Drumheller met with PA Minster of Health 
Fathi Abu Moghli to discuss possible OPIC involvement in the 
health sector.  The MoH estimates it spends approximately $50 
million annually to send patients to Jordan, Israel, and 
Egypt for treatment due to the lack of specialized facilities 
in the Palestinian Territories.  OPIC will explore the 
feasibility of funding specialized clinics in conjunction 
with the MoH, which would serve patients in the West Bank and 
ultimately become self-sufficient.  (Note: A similar project 
in Gaza was explored in early 2006, but was suspended once 
the Hamas government took power.) 
 
¶5. (U) Drumheller also continued discussions with the 
Anglican Church about financing the construction of an 
apartment building in Jerusalem, proceeds from which would 
support health clinics and schools run by the Church in the 
West Bank. 
 
¶6. (U) OPIC cleared this message. 
WALLES