Palestine

Vue sur Hebron, Territoires palestiniens — Photo d'illustration © Kyle Taylor, Flickr (CC BY 2.0)

Present on the ground since 1998, AFD Group focuses its operations in Palestine on three priority areas: access to basic services, human capital development, and support to the private sector. The war that began on October 7, 2023, has significantly worsened the vulnerability of the Palestinian Territories. In this context of crisis, AFD Group continues to adapt and take action. In line with France’s policy in support of a two-state solution, the Group is working to strengthen essential services, support affected populations, and build a sustainable future.

Context

Palestine, as defined in 1948, covers 6,020 km² divided between the West Bank (including East Jerusalem) and the Gaza Strip along the Mediterranean coast. It is home to a population of 4.9 million.

Twenty-five years after the Oslo Accords, the situation in the Palestinian Territories has sharply deteriorated since the outbreak of the war on October 7, 2023.

In the Gaza Strip, 2.2 million people are affected by famine. As of September 2025, the death toll has surpassed 63,000, with over 200,000 injured. Most hospitals are no longer operational, and humanitarian assistance remains severely obstructed. Nearly 90% of Gaza is now classified as an “active combat zone.”

In the West Bank, the economy is on the brink of collapse. The Palestinian Authority is facing an acute fiscal crisis, unable to pay full public salaries or maintain basic services. The technocratic government appointed on March 28, 2024, has launched reforms – particularly in public finance management and budget transparency – as prerequisites for increased budgetary support.

In March 2025, the Arab League endorsed the Gaza Reconstruction Plan put forward by Egypt, estimating needs at USD 53 billion. As of September 2025, with over half of Gaza's built environment destroyed and 50 million tonnes of debris, this figure is already considered an underestimate.

In July 2025, France and Saudi Arabia co-hosted a conference on the two-state solution. Several countries committed to recognizing the State of Palestine during the September 2025 UN General Assembly. In response, the Israeli government has threatened retaliatory measures and is considering reoccupying parts of Gaza and the West Bank.

Amid this critical situation, AFD Group contributes to the implementation of France’s policy in support of a two-state solution. AFD supports the Palestinian Authority’s development strategy, focusing on strengthening public and private institutions at both central and local levels. PROPARCO plays a key role in supporting the private and banking sectors, while Expertise France is implementing several technical cooperation projects to support institutional actors and civil society.

Our approach

AFD Group in Palestine: Strengthening institutions, improving living conditions, and supporting the private sector

AFD’s operational strategy in Palestine (2021–2025) is structured around three key pillars, which remain highly relevant since the outbreak of the war in October 2023.

AFD supports investments and reforms in the water & sanitation, local governance, and healthcare sectors. Projects now also integrate rapid response mechanisms for demolitions and urgent needs.

Water and sanitation are a key focus. Since 1998, AFD has financed around 20 projects in this sector, totaling nearly €200 million.

The “Northern Nexus” project combines investments in water, sanitation, and renewable energy in the northern West Bank while reinforcing public operators. It works to improve access to drinking water, enlarge sanitation networks, and support the shift towards renewable energy, thereby reducing electricity costs and dependence on Israeli imports.

Local governance is another strategic priority:

The “Rural Development Project in the Jordan Valley - Area C” project builds local authority capacity, expands basic services, supports income-generating activities, and offers legal and psychosocial assistance to residents.

Health is equally critical:

The “Neonatal and Child Health in Gaza and the West Bank” project improves access to reproductive, maternal, newborn, and child health (RMNCH). The project’s responsiveness has proven vital during the war. A second phase continues to provide emergency health services, even as severe restrictions limit the entry of medical equipment into Gaza.

AFD works to strengthen social cohesion and protect local identity and culture, thereby reinforcing Palestinians' identity and presence in their land through both human and economic development.

AFD supports around 15 civil society projects, implemented by French, Palestinian, and international NGOs.
A dedicated project fosters the resilience of Palestinian populations in East Jerusalem.
Expertise France is launching an EU-funded project supporting Israeli and Palestinian civil society organizations working for peace.

PROPARCO deploys a wide range of financial instruments to support the Palestinian private sector, promote job creation, and strengthen the financial system (banks and microfinance institutions).

Access to concessional resources remains a key challenge, as does the limited competitiveness of international financial institutions in the local market due to high global interest rates. Over the past five years, PROPARCO has invested over €120 million in loans, equity, and guarantees to boost the private sector.