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Finance For Jobs (F4J) Series of Projects: Investment in the Economy and Human Capital

The Finance for Jobs (F4J) Project has been implemented in three successive phases, each building on the achievements and lessons learned from the previous one. F4J 1 focused on designing and piloting innovative financial instruments aimed at addressing market constraints, stimulating private sector investment, and creating employment opportunities. This phase served as a proof of concept to identify effective approaches and refine implementation modalities. Building on these foundations, F4J 2 shifted from piloting to scaling, expanding successful interventions to reach a broader base of private sector beneficiaries and increase investment mobilization and job creation. F4J 3 continues this trajectory by further deepening private sector engagement and promoting inclusive, sustainable job creation, with a focus on strengthening economic growth and resilience.

Finance for Jobs is a series of projects over 8 years with a budget of $44.5 million, for the benefit of the Ministry of Finance and Planning (MoFP), funded by the World Bank and implemented by DAI. The project is a public finance mechanism aiming to bolster the Palestinian economy by incentivizing private capital mobilization and job creation in the West Bank and Gaza.

F4J Series of Projects

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Design and Initial Testing of Innovative Financial Instruments

F4J 1

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Moving from Proof-of-Concept to Scaled Impact

F4J 2

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Driving Investment and Inclusive Job Creation

F4J 3

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Project Fund

Gov. MoFP

Implemented By

$44.5
M

Budget

2017 -
2028

Timeline

F4J’s Objectives:

Stimulate private capital mobilization by fostering private sector investments.
Job creation opportunities in the West Bank and Gaza.

F4J Innovative Financial Instruments

Investment in the Economy and Human Capital

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Instrument 1: Development Impact Bond (DIB)

Is a market-driven financing instrument designed to enhance the employability of the Palestinian workforce by aligning skills development with the needs of the private sector. The instrument targets young people aged 18 to 29 years and focuses on equipping them with the technical and employability skills demanded by employers. Under the DIB, financing is linked to the achievement of predefined results rather than the delivery of activities. Based on demonstrated private sector demand, the instrument finances specific outputs and outcomes, including the successful completion of training programs, placement in apprenticeships, internships, or other work-based learning opportunities, and sustained employment. This results-based approach incentivizes service providers to deliver high-quality training that leads to measurable labor market outcomes.

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Instrument 2: Investment Co-Financing Facility (ICF)

Is a public financing instrument designed as a risk-sharing mechanism to support commercially viable new or expanding private sector investment projects. The instrument addresses market and institutional constraints that limit private investment by sharing project risks and incentivizing businesses to undertake productive investments that generate significant economic and employment benefits. The instrument targets eligible investment projects with a minimum investment value of US$1 million and an expected creation of at least 45 new jobs. It provides co-financing of up to 30% of eligible project costs, primarily supporting capital expenditures such as machinery, equipment, production lines, and other productive assets.

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Instrument 3: Emergency Response Program (ERP)

Aims to provide temporary financial support to Palestinian small and medium enterprises (SMEs) to help sustain business operations, preserve employment, and enhance resilience during a period of acute economic disruption. The instrument targets financially viable SMEs operating in priority sectors, with between 5 and 49 employees and annual sales ranging from US$100,000 to US$3 million. Eligible enterprises may receive grants of up to US$50,000 over a period of up to six months to finance employee salaries, essential operating expenses such as rent and utilities, and the repair, replacement, or upgrading of productive assets and equipment.