June 12, 2009 / 10:24 AM / 10 years ago

Libya earmarks 11.8 bln to draw foreign investment

ROME (Reuters) - Libya’s Muammar Gaddafi, promising Italy priority access to an 11.8 billion euro plan to attract foreign investment, said on Friday his oil-rich nation could act as a gateway for companies interested in fast-growing Africa.

In a speech to some 600 Italian businessmen, during a historic first visit to Libya’s former colonial ruler, Gaddafi said his North African nation was seeking Italian investment in everything from oil to agriculture, roads to irrigation, and renewable energy.

“Italian companies can find a route into Africa via Libya,” said Gaddafi, who currently holds the chair of the 53-nation African Union.

Western firms have eyed infrastructure and energy projects in Libya since international sanctions were lifted in 2003.

Relations between Libya and Italy, however, have taken a giant leap forward since Italian Prime Minister Silvio Berlusconi made a historic apology for atrocities committed during Italy’s 1911-1943 colonial rule.

Italy offered 5 billion euros in compensation, to be spent on Italian infrastructure projects in Libya.

“If the left was in power, Italian companies would not have such fortune. As long as Berlusconi is in government they will have better opportunities,” Gaddafi said, to a round of applause from members of Italy’s Confindustria business group.

Gaddafi said his country would not favour oil and gas exports to other foreign countries if it was at the expense of supplies to Italy.

“More than 70 percent of Italian’s energy requirements come from abroad, mostly from Libya. Italy has great need of Libya so Libya will not favour supplying gas and petrol to other countries if it is at Italy’s expense,” said Gaddafi.

“Italian companies will have priority in Libya,” he told Confindustria, whose president, Emma Marcegaglia, said Libya had “promised to invest 11.8 billion euros in the coming years to attract foreign investment, also via the creation of joint ventures in the private sector”.


Marcegaglia said she saw synergies with Libya in energy, renewable energy, petrochemicals, engineering and tourism. Libya has already invested in major Italian firms like UniCredit, where it has a seat on the board, and Eni.

The head of Libya’s $65 billion sovereign wealth fund said it was considering investing in Italian power and infrastructure companies such as Enel and Impregilo.

Abdulhafid Zlitni, chairman of the Libyan Investment Authority wealth fund, told Reuters this week that Europe’s No. 2 utility Enel was among various companies Libya is eyeing.

Enel, which launched an 8-million-euros rights issue this month, has said it had received strong interest from Libya and the fund could directly subscribe to the capital increase.

Libya’s financial purchases have always been carefully planned with other major shareholders since a controversial investment in the ‘70s when it came to the rescue of Fiat at the invitation of the head of its founding family, Giovanni Agnelli.

Libya has promised to set up special benefits for Italians investing there, including discounted energy, guarantees for their assets, tax-free imports of capital goods and, crucially, a five-year tax “holiday” in their profits.

But Gaddafi warned foreign investors against trying to bribe Libyan officials, saying: “Among the reasons we carried out the revolution was corruption. We are very sensitive about this ... You cannot say you have not been warned.”

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