The Libyan Investment Authority (LIA) is making a renewed attempt to secure some easing of international sanctions on its assets, so it can launch a new wave of domestic investments, Forbes has reported.
LIA has been under UN sanctions since 2011, but it says it now wants to be allowed to transfer money from one frozen bank account to another, to avoid being exposed to negative interest rates.
“It also wants to be allowed to reinvest funds from maturing bonds and to be allowed to make new investments with frozen cash.” The report says.
LIA has written to the UN Sanctions Committee over the past month, highlighting the negative impact of the sanctions on its portfolio – an independent report in late 2020 showed its portfolio could have been worth $4.1 billion more if it had not been under sanctions.
According to Forbes, a recent audit of LIA’s portfolio by accountancy firm Deloitte found the LIA had assets of $68.35 billion, barely more than the previously-announced figure of $67.16 billion in 2012.
LIA chairman, Ali Mahmound Hassan Mohammed, said in an interview with Forbes, that the main reason for the small change was the freezing of its assets by UN sanctions – a restriction it has been supportive of, despite the costs it brings.
“Some of the funds we are not able to reinvest, like bonds and fixed income, when they have matured. This demonstrates the negative impact of the sanctions regime. In a nutshell, the sanctions freezing regime is the main reason for no increase in our capital.” LIA Chairman explained.
He added that this did not mean it was looking for all the sanctions to be removed; however, they are not requesting lifting of the freezing orders.
“We are requesting slight amendments in a manner which will avoid the negative impact on our funds. We had identified up to $1 billion of potential deals inside Libya, mostly in the power and real estate sectors. We will enter with force investments inside Libya. We will contribute to the rebuilding of Libya, especially in power and real estate, this year.” He said.
Forbes indicated that the current portfolio is heavily weighted towards cash, which makes up 49% of the total. A further 29% is in fund investments and 17% in business and real estate assets, leaving 5% in other areas including loans.
In terms of geography, Europe accounts for 37% of the portfolio and North America a further 33%, followed by Africa with 23%, the Middle East with 6% and South America the remaining 1%.