Palestinian Territories

In a region marked by water scarcity, the Palestinian territories and Israel have important groundwater reserves. Resources are becoming scarcer and water quality is declining, which affects Israelis and Palestinians alike, since both depend on cross-border reserves.

One third of Palestinian households are not connected to the central water supply system and are supplied with substandard water by private providers. In addition, bottlenecks in the central supply system occur time and again, especially in the summer months. The situation in the Gaza Strip is alarming. The groundwater there is practically undrinkable due to pollution and salinisation.

Only a small portion of waste water is treated in the Palestinian territories. Untreated wastewater pollutes the environment and poses a risk to people's health.

Since the beginning of Financial Cooperation in the Palestinian territories, programmes in the water, sanitation and waste sectors have been financed with a total grant volume of around EUR 300 million.

KfW's support includes the expansion of the drinking water supply and the construction of modern waste water treatment plants in both the West Bank and Gaza. Some of the treated wastewater is also used for agriculture. KfW also supports waste management in the Ramallah/Al Bireh region.

The continuing Israeli occupation and the intra-Palestinian conflicts are placing a considerable strain on economic development in the Palestinian territories. Many companies are cut off from their supply, sales and labour markets by closed borders. At the same time, many people lack the right qualifications for the labour market. Unemployment is high.

The German commitment is responding to this situation with a wide range of measures: KfW, together with other European donor agencies, is helping the Palestinian Ministry of Education to improve the education system. This will allow new schools to be built and practical vocational training courses to be developed.

The European-Palestinian Credit Guarantee Fund (EPCGF) was established in 2005 with the aim of strengthening in particular small and medium-sized enterprises (SMEs). The Fund facilitates SMEs' access to medium and long-term bank loans, thus strengthening their viability and securing jobs and income. The regional SANAD Fund also supports local financial institutions.

The Employment Generation Program (EGP) provides access to paid work for people who are fit for work – this helps to improve the income situation and also supports various social organisations, e.g. for people with disabilities.

With the creation of the Palestinian Authority in 1994, the central administrative structure was created in the Palestinian territories. The municipal level - the cities and municipalities – also plays an important role in relations between the state and its citizens and in the provision of state services.

A national municipal development programme was developed in cooperation with various international partners with the aim of enabling the municipalities to adequately fulfil their responsibilities in terms of content and funding. It is implemented by the Palestinian Municipal Financing Fund (MDLF) which the German government participates in via KfW. Municipalities can use the funds from the MDLF, for example, to build roads and playgrounds. The transparency and quality of the local administration influences the level of funding provided by the MDLF.