CYPRUS: Natgas fund to look at ‘safe’ investments abroad

Future income from hydrocarbon exploitation with Cyprus’ Exclusive Economic Zone (EEZ) will be invested to reduce public debt and for “safe” investments abroad according to a bill for the establishment of National Investment Fund approved by the Council of Ministers.

 
As Finance Minister Harris Georghiades said after Monday’s Council of Ministers meeting, at the Presidential Palace, the bill sets the framework for managing future income from natural gas, according to the Cyprus News Agency.
Georghiades noted that by establishing the Fund, there will be transparent procedures, many levels of checks and specific rules regarding management of this income and explained that the main characteristic of this framework is that income will be managed for the benefit of future generations by reducing public debt and by creating an investment fund that will make “very safe” investments.
The bill provides that if public debt is more than 80% of GDP then 50% of the annual income from hydrocarbons will be used to reduce public debt. If on the other hand public debt is between 60-80% then 25% of the annual income will be used to reduce public debt.
Georgiades underlined that activation of the whole concept will not occur immediately as there still some years to go before an income from hydrocarbon exploitation starts flowing in, but noted at the same time that the fact that Cyprus moves forward to put in place a credible and transparent framework contributes to restore trust in the country.