After a long delay, Israel’s sovereign wealth fund will start on June 1

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JERUSALEM, May 30 (Reuters) – Israel’s long-delayed sovereign wealth fund can start operating on June 1 now that taxes on profits from natural gas and other resources have passed the minimum of 1 billion shekels ( $301 million), according to the Ministry of Finance and the tax administration. said Monday.

Finance Minister Avigdor Lieberman will sign an order on Wednesday transferring NIS 1.14 billion of levies accrued to date to the fund, the ministry and the authority said in a joint statement.

Israel discovered huge natural gas deposits in the eastern Mediterranean a decade ago and major production began in 2013.

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The wealth fund, aimed at protecting an overheated currency from the sudden expansion of national wealth, was set up in 2014 and was supposed to start operating in 2018, but political unrest and a slower revenue stream have caused delays.

It is not yet clear what the fund could invest in, but analysts believe it will be in assets such as stocks and corporate bonds in international markets, with profits gradually flowing back to Israel.

The Bank of Israel, Israel’s central bank, will manage the fund.

Some 3.5 percent of the total NIS 1.14 billion, or NIS 40 million, will be allocated for social, economic and educational purposes, according to a bill the government will submit to parliament, the statement said.

“The money comes back to the citizens,” Lieberman said.

The fund bottomed out on last year’s gas sales from the offshore Tamar field, the statement said. More recently, the largest Leviathan field came online, selling gas to Israel, Egypt and Jordan.

The tax authority said it was holding nearly another billion shekels from levies whose status is not yet final.

Earlier in the year, Lieberman had estimated that the minimum would be reached and the fund would begin operations in September.

($1 = NIS 3.3182)

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Reporting by Steven Scheer and Ari Rabinovitch; Editing by David Holmes

Our standards: The Thomson Reuters Trust Principles.

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