Italy and the Gulf States Reinforce Economic Ties
The Kuwait Investment Authority (KIA), a major sovereign wealth fund in the Gulf, will invest €500 million into the Italian Strategic Fund (FSI), and through the fund into Italian companies. Specifically, the governments of Kuwait and Italy will create a company with a capital commitment of €2.5 billion, giving the FSI 80% control and the KIA 20%. The deal is earmarked for signatures in March 2014.
On February 4, 2014, in Kuwait City, Italian Prime Minister Enrico Letta announced the deal to the press. The committed capital will be used to assist and boost Italian enterprises.
To combat rising unemployment in Italy, public officials are courting Gulf investors to invest in Italy, to spur domestic economic growth and decrease government liabilities. Other major sovereign investors in Italy include the Qatar Investment Authority and the Russian Direct Investment Fund.
The government of Qatar is planning on continuing making major investments in Italy – especially in the sectors of tourism, energy and healthcare. A delegation from the Qatar Investment Authority will visit Italy to analyze investment opportunities.
Italian Prime Minister Enrico Letta indicated Qatar could possibly invest in state-backed energy giant Eni SpA. There could be a possible capital injection for Eni to expand energy production. The mountainous Basilicata region of Italy is home to the Val’d Agri oil field, one of the biggest in Western Europe. The field is located in the Southern Apennines; Eni began production in 1996.
The Qatar Investment Authority invested a significant amount of capital in Spanish energy firm Repsol SA.
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