Abraaj Capital, Palestine Investment Fund Launch $50 Mln Private Equity Fund for Palestine SMEs

SMEs Crucial to Palestinian Economy

DUBAI, January 28 - The Palestine Investment Fund (PIF), a publicly owned
investment fund which aims to strengthen the Palestinian economy through key
strategic investments, and private equity group Abraaj Capital announce the
first closing of a US$50 million private equity fund dedicated to Palestine.

The private equity fund will focus on investing in small- and
medium-sized enterprises (SMEs) in Palestine across a range of sectors and
stages of maturity. Abraaj is the largest private equity group in the Middle
East and North Africa, with offices in six countries.

With a first closing at US$15 million, the private equity fund
is the first of its kind dedicated to the Palestinian economy. The initial
commitments from the sponsors - PIF and Abraaj - will be supplemented by
funds raised from investors in further closings planned later this year.

SMEs account for more than 95 per cent of enterprises in
Palestine, 84 per cent of private-sector employment and 55 per cent of gross
domestic product.

Although SMEs are a critical backbone of the local economy,
the sector is underserved in terms of access to capital and degree of
institutionalization. The private equity fund will give access to much needed
capital for growth and expansion, as well as leverage managerial,
operational, strategic know-how and regional networks. It will also help
strengthen corporate governance.

"This is a great vote of confidence for the Palestinian
economy highlighting that Palestine is open for business and that the country
offers excellent opportunities for investors," said Dr. Mohammad Mustafa,
Chairman and Chief Executive Officer of PIF.

"Investments like these not only give investors - local and
international - potentially excellent returns but are crucial in
strengthening our economy, supporting innovation and entrepreneurship,
building locally based regional platforms, transferring know-how and creating
hundreds, if not thousands of new jobs," Dr. Mustafa said.

Fund Manager

Abraaj, through its dedicated SME investment-management
platform - Riyada Enterprise Development - will manage the fund, which is
expected to make 20 to 25 investments over the next four years.

"We are very proud to be a part of this initiative and to be
able to contribute to the development of the Palestinian economy in a
sustainable way," said Arif Naqvi, founder and CEO of Abraaj.

"Through this fund we are directly addressing the needs of
Palestinian entrepreneurs who, as in other parts of the world, have the
capacity to transform the lives of those around them by creating sustainable
job-growth and raising living standards," Mr. Naqvi said. "Through it we also
aim to provide top-tier returns to our investors."

Dr. Mustafa emphasized that the private equity fund reflects
PIF's commitment to strengthening the Palestinian private sector, especially
SMEs, and to building a strong Palestinian economy not dependent on foreign
aid.

The fund complements PIF's Loan Guarantee Facility (LGF),
which facilitates financing for SMEs by providing loan guarantees to the
lending banks. LGF has facilitated more than US$50 million of financing to
more than 200 SMEs in the last two years.

PIF is the largest and most dynamic investor in Palestine,
with US$800 million in assets under management. It aims to build a strong
economy by developing strategic projects in vital sectors, such as SMEs, real
estate, energy, telecommunications and finance, while maximizing long-run
returns for its ultimate shareholder - the people of Palestine. PIF has an
unrivalled track-record in partnering with leading international, regional
and local institutions, and attracting foreign direct investment to
Palestine.

SME Platform

The private equity fund with Abraaj is the first investment
vehicle managed by Riyada Enterprise Development, Abraaj's recently launched
investment platform dedicated to SMEs.

Abraaj has seeded the Riyada platform with US$50 million of
its own capital. As Abraaj builds its SME platform out across the Middle East
and North Africa, the size of the regional SME fund is expected to increase
substantially to about US$ 700 million through Abraaj's established regional
and international partners, and investors.

The Riyada platform marries the largest single source of
long-term capital dedicated to entrepreneurs in the region with an investment
strategy specifically tailored to the SME segment.

It also addresses the biggest issue facing regional SMEs today
other than access to finance, namely institutional support, including
back-office functionality, improved governance, and access to top-tier human
talent and mature business networks.

Abraaj has permanently relocated several of its senior
investment professionals into Riyada and will establish a presence in the
Palestinian city of Ramallah to support the private equity fund. Together
with selective additional hires, Riyada will - in due course - comprise 25 to
30 full-time investment professionals.

Corporate Social Responsibility

In parallel with the fund's investment activities the sponsors
have made a commitment to a number of corporate social responsibility (CSR)
initiatives in Palestine. The private equity fund intends to adhere to the
United Nations Principles for Responsible Investment and develop
environmentally friendly frameworks for its partner companies.

As part of a commitment to foster a supportive eco-system for
entrepreneurs, the sponsors will establish a support programme called Bidaya
(Arabic for 'start') which will provide mentorship for entrepreneurs through
Abraaj's extensive network of partners, professionals and academics.

Abraaj is also seeking to provide additional funds for
disadvantaged communities based on the concept of 'patient capital' and
socially responsible investing.

PIF adheres to CSR objectives, which includes unparalleled
support to local cultural, charitable, youth and educational organisations.

About the Palestine Investment Fund: The Palestine Investment
Fund (PIF) was established in 2003 as a publicly owned investment company,
which aims to strengthen the local economy through key strategic investments,
while maximizing long-run returns for its ultimate shareholder; the people of
Palestine. PIF has US$800 million of assets under management and is
headquartered in Ramallah, Palestine. PIF's investment focus includes the
following strategic sectors: real estate, hospitality, finance, industry,
telecommunications, power & energy. In the last few years PIF has launched a
number of landmark projects including: US$700 million mobile company,
Wataniya mobile, in partnership with Qatari Qtel; US$1.5 billion affordable
housing program to develop 30,000 affordable housing units over the coming 5
years; US$400 million commercial real estate development in downtown Ramallah
("Ersal Center"), in partnership with the Land Holding, Saudi Arabia (a
member of AlRajhi Investment Group); US$500 million mortgage finance program
in partnership with US based Overseas Private Investment Corporation and the
International Financial Corporation, amongst others. PIF works in partnership
with international, regional and local partners, based on values of
transparency, accountability, commitment and in line with its corporate
social responsibility and sustainability objectives. PIF has a strong
reputation across global markets as a trusted and responsible investment
partner. PIF is supervised by an independent General Assembly and Board of
Directors composed of seven leading public figures. Members of the General
Assembly and Board of Directors are appointed by the President for a
three-year term. Moreover, PIF has a world class team who demonstrate the
highest levels of leadership, integrity and professionalism. For more details
about PIF see www.pif.ps.

About Abraaj Capital: Abraaj Capital is the largest private
equity group in the Middle East, North Africa and South Asia (MENASA). Since
inception in 2002, it has raised about US$ 7 billion and distributed almost
US$ 3 billion to investors. The group has made 36 investments in 11 countries
and exited 21. It operates offices in six countries across the region,
including Turkey, Egypt, Saudi Arabia and Pakistan, with its base in Dubai.
More than 80 investment-related professionals work for Abraaj. Abraaj has
holdings in 26 companies, including some of the region's most prominent, such
as Air Arabia, the region's biggest low-cost carrier; Acibadem Healthcare
Group, Turkey's biggest privately owned operator of premium hospitals; and Al
Borg Laboratory, the Middle East's biggest privately owned medical-testing
laboratory company. Abraaj has won many international awards, including
'Middle Eastern Private Equity Firm of the Year' from London-based Private
Equity International four years in a row. Abraaj Capital Ltd., a member of
the Abraaj Capital group, is licensed by the Dubai Financial Services
Authority. The group is also an associate member of the European Venture
Capital Association. Abraaj's commitments to Corporate Social Responsibility
include a US$ 10 million educational trust fund for Palestinian children who
lost parents during conflict in Gaza in December 2008 and January 2009. The
Abraaj Capital Art Prize, the world's most generous art prize, is designed to
support artists from the MENASA region. For more details about Abraaj, see
www.abraaj.com

This document is issued by the Abraaj Capital Group and the
Palestine Investment Fund and is intended for general information purposes
only. It does not constitute an offer or solicitation for any business
transaction or investment advice.

    For enquiries, please contact:

    Abraaj Capital
    James Cordahi
    Mobile:      +971-50-554-7635
    Switchboard: +971-4-506-4400
    Email: james.cordahi@abraaj.com

    Dubai International Financial Centre (DIFC)
    Gate Village 8, 3rd Floor
    PO Box 504905
    Dubai, United Arab Emirates

    www.abraaj.com

    The Palestine Investment Fund
    Al-Hassan Hleileh
    Switchboard: +972-2-297-4971
    Email: ahleileh@pif.ps

    The Palestine Investment Fund
    PO BOX 413
    Ramallah, Palestine

    www.pif.ps

For enquiries, please contact: Abraaj Capital, James Cordahi, Mobile: +971-50-554-7635, Switchboard: +971-4-506-4400, Email: james.cordahi at abraaj.com . Dubai International Financial Centre (DIFC), Gate Village 8, 3rd Floor, PO Box 504905, Dubai, United Arab Emirates . The Palestine Investment Fund, Al-Hassan Hleileh, Switchboard: +972-2-297-4971, Email: ahleileh at pif.ps ; The Palestine Investment Fund, PO BOX 413, Ramallah, Palestine.