Last Updated: Mon Feb 20, 2012 19:03 pm (KSA) 16:03 pm (GMT)

Israel plans sovereign wealth fund to gain from gas fields

The fund sets to provide Israel with extra financial security as profits will be transferred into the government budget. (File photo)
The fund sets to provide Israel with extra financial security as profits will be transferred into the government budget. (File photo)

Israel is to set up a new sovereign wealth fund, expected to have $80 billion under management by 2040, in an effort to manage incomes from a series of large offshore gas fields.

The fund sets to provide Israel with extra financial security as profits will be transferred into the government budget to finance projects in education and national security, the Financial Times (FT) reported on Sunday.

Israeli prime minister, Benjamin Netanyahu, said Israel is anticipating the rewards of the fund, which he described as natural gas “royalties.”

“True, the fruits of this fund will arrive only in a few years, but they will arrive. This will be a lot of money for the state of Israel from royalties from natural gas under the sea,” the newspaper reported.

The fund would be tapped in the event of war, natural disasters or a severe economic crisis.

Analysts expect that Israel sets to gain from the discovery of two large offshore gas fields since 2009, in which one field is estimated to contain 500 million cubic meters of natural gas, making it the biggest such find ever recorded in the Mediterranean, the newspaper reported.

Both fields are being developed by a consortium of Israeli and U.S. companies.

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