The Palestinians issued their first bonds on Tuesday, a new milestone in their effort to build the trappings of an independent state.
The $70 million in five-year corporate bonds was issued by the biggest company in the Palestinian territories, the Palestinian Development and Investment Co., which has investments in real estate, energy, pharmaceuticals, electronics, communications and tourism.
PADICO's chief executive, Samir Hulileh, said the bonds would help to finance a $300 million power plant and an entertainment and tourism center in the West Bank.
Palestinian and Jordanian banks bought the bonds, he said.
Salam Fayyad, the prime minister of the Palestinian Authority that controls the West Bank, said his government was encouraging the private sector to float bonds and planned to issue its own bonds at an unspecified date.
"The Palestinian Authority is determined to build the foundations of an independent state," said Fayyad, a U.S.-educated economist, adding that the government had dramatically reduced its reliance on foreign aid to a planned $970 million this year from $1.8 billion in 2008.
In late 2009, Fayyad said he planned to lay the foundations of a state within two years.
Last month, the U.N. praised the Palestinian Authority's progress on building institutions required for a future state, such as governance, rule of law, human rights, education and social services.
But stalled peace talks with Israel and the presence of a rival government in the Hamas-ruled Gaza Strip have complicated the state-building effort.
Last week, the two major Palestinian factions signed an agreement meant to end the four-year rift between the West Bank and Gaza.
And the Palestinians are hoping to sidestep the deadlocked talks with Israel by asking the United Nations to recognize their independence at a vote in the annual General Assembly in September.