The Overseas Private Investment Corporation (OPIC) of the US has signed an agreement to provide $30 million in insurance for a
$45 million private equity fund set up to target companies in Oman, Jordan, the West Bank and Gaza.
The InterArab Investment Fund is to be managed by a California-based company set up for the purpose by what OPIC describes as ‘executives with significant experience managing private equity investments both in the Middle East and the United States’. The fund, which is designed to run for 12 years, will invest in new, expanding or privatising businesses.
The fund is raising money for investment from pension funds and other investment pools in the US, an OPIC spokeswoman said. In return for its guarantees, OPIC stipulates that investments will be in companies which use US exports and meet certain environmental requirements. Part of the reason why OPIC is backing the fund is clearly that investment in the Palestinian areas is intended to promote the peace process by stimulating economic growth there.
OPIC, which is state-owned but self-financing, has also offered guarantees to another Middle East private equity fund, managed by Siguler Guff & Company of the US, which aimed to raise $250 million to invest in Morocco, Tunisia and the Levant, including Gaza and the West Bank. Company officials were not available to comment on whether this fund, which was launched last July, has begun investing yet (MEED 20:9:96).