Israel sets up 1 billion shekel biotech fund

JERUSALEM, June 29 (Reuters) - Israel is setting up a capital fund of up to 1 billion shekels ($255 million) to finance biotechnology start-up companies, its industry and trade and finance ministries said on Monday.

The state would contribute some 250 million shekels to the fund which it hopes to rise to 1 billion shekels using loans from private investors. The aim is to encourage and advance growth in Israel's biotech sector.

The government will split profits from activities in the fund between itself and private investors, the ministries said in a statement.

"There's great importance to the fact that 250 million shekels of government money is allocated to the development of an industry whose workforce is of great value and whose development and prosperity are crucial to the economy," said Eli Ofer, chief scientist at the Industry and Trade Ministry. (Reporting by Joseph Nasr; Editing by David Holmes) ($1 = 3.92 shekels)