Libyan domestic fund to direct some investments abroad-official

A Libyan domestic investment fund with estimated assets of $1 billion could direct some of its investments abroad, especially to neighbouring Tunisia, the chief executive of the National Investment Company said.

"Although the fund is focused on domestic investment, our laws allow for foreign investment," Basheer Ashour told Reuters over the telephone from Tripoli.

"We could make some investments in Tunisia," he said.

He said the fund was planning to invest in what he described as "conservative tourism", catering to a growing number of tourists looking to stay in hotels and resorts which observe Islamic rules, including banning alcohol.

"It's a very early stage but there are discussions now," he said, referring to the Tunisian investment.

Libyan Central Bank Governor Saddeq Omar Elkaber told Reuters last month the Libyan government had no plans to inject fresh cash into its foreign investments, including Italian bank UniCredit, as it needed the money for reconstruction efforts.

Ashour said he was leading a restructuring plan of the fund, established in 1986, that aims at increasing its investments locally and abroad. He said one project was to build a transport network of buses and taxis inside and between Libyan cities.

He said, however, that there are no immediate plans to increase the fund's capital by tapping into government coffers.

"For foreign projects we're thinking of seeking external financing, preferably through means of Islamic banking," he said.

The U.N. Security Council's sanctions had frozen $170 billion in Libyan assets, but a large sum was released in December when the council lifted the sanctions on the central bank's $100 billion, mostly cash assets.

Ashour said he expected the National Investment Company's capital to increase by up to 60 percent over the next two to three years.

"It's possible that the size of the fund increases in the next two to three years to 1.5-2.0 billion Libyan dinars ($1.21 -$1.61 billion)," he said.

The fund has investments in the oil, real estate, banking and insurance sectors, including a 55 percent stake in the Sahara Insurance Co.

He said the fund had 200 million dinars in cash that would be mostly used to complete existing real estate projects in Libya, including hotels.

Libya's main investment vehicles is the $65 billion Libyan Investment Authority.

Its acting chief executive told Reuters late last year the cash-heavy fund could be used to fund reconstruction projects after a nine-month civil war that ended the rule of dictator Muammar Gaddafi.

(Source: Reuters)

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