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

JERUSALEM, May 30 (Reuters) – Israel’s long-delayed sovereign wealth fund can now begin operating on June 1, when taxes on profits from natural gas and other resources exceed a minimum of 1 billion shekels ($301 million). More has been done, the finance ministry and tax authority said on Monday.

The ministry and the authority said in a joint statement that Finance Minister Avigdor Lieberman would sign the order on Wednesday to transfer the 1.14 billion shekels accumulated in the fund.

Israel discovered vast reserves of natural gas in the eastern Mediterranean a decade ago, and major production began in 2013.

The wealth fund, aimed at shielding a hot currency from a sudden expansion in national wealth, was set up in 2014 and began operations in 2018, but political turmoil and a slow stream of revenue caused delays. Is.

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

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

Of the total 1.14 billion shekels, about 3.5%, or 40 million shekels, will be allocated for social, economic and educational purposes, according to a bill the government will present to parliament, the statement said.

“The money is returning to the citizens,” Lieberman said.

According to the statement, the fund reached its minimum last year thanks to the sale of gas from the offshore Tamar field. The big Leviathan field has recently come online, selling gas to Israel, Egypt and Jordan.

The tax authority said it has about a billion shekels from the levy, the status of which is not yet final.

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

($1 = 3.3182 shekels)

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

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