The Libyan Investment Authority anticipates U.N. approval by year’s end to actively manage its $70 billion in assets, marking a first in over a decade, the chief executive revealed to Reuters.
The LIA, founded in 2006 during Muammar Gaddafi’s rule to oversee Libya’s oil revenues, has been subject to a U.N. asset freeze since the 2011 revolution that ousted Gaddafi.
The LIA must secure approval from the UN Security Council to make new investments or move cash from accounts with negative interest rates, where it has been losing money.
Ali Mahmoud Mohamed, Chief Executive, expressed optimism that the council will grant significant approval for the investment plan submitted in March by November or December.
The initial phase of LIA’s four-part strategy involves the “very straightforward” task of reinvesting accumulated funds, such as returns from bond investments, that have accumulated during the asset freeze.
The LIA had formerly attempted to manage its assets actively, but after Gaddafi’s fall, internal conflicts led to competing chairmen supported by various factions.
In 2020, a British court issued a ruling supporting Mohamed.
A Deloitte audit from that year estimated the asset freeze had cost the LIA around $4.1 billion in probable returns.
He noted that transparency has since increased, as the LIA published audited financial statements for 2019 in 2021.
The organization plans to release the 2020 figures shortly and intends to provide annual reports from next year onward.
Although the LIA was ranked 98th out of 100 sovereign funds for sustainability and governance in a 2020 Global SWF ranking, it improved to 51st place this year.
The fund’s estimated $70 billion in assets includes $29 billion in global real estate, $23 billion in deposits scattered across Europe and Bahrain, and $8 billion in equities invested in more than 300 companies globally. It also holds around $2 billion in matured bonds.
The UN Security Council Committee was unavailable for immediate comment. Following a meeting with the LIA last year, committee members recognized the advances made in executing the LIA’s Transformation Strategy and highlighted the importance of ensuring that the frozen funds benefit the Libyan populace.
Ali Mohamed stated that the LIA plans to seek approval this year for two additional components of its investment strategy: one focusing on its equity portfolio and the other on domestic investment initiatives.
The LIA aims to direct investments into domestic projects such as solar energy and boosting oil exports.
As one of Africa’s major oil exporters, Libya produces approximately 1.2 million barrels of oil daily.
Mohamed stated that if the UN does not endorse the investment proposals, the LIA will persist in its efforts, continuing to seek approval and make requests.
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