TEL AVIV Oct 23 A proposal by Israel's Finance
Ministry to create a sovereign wealth fund similar to Norway's
to safeguard billions of dollars in windfall natural gas revenue
received initial approval from a government panel.
The proposal was approved by the ministerial legislative
committee but still needs to be passed in parliament, the
ministry said on Tuesday.
The discovery of some of the world's largest offshore gas
fields has given Israel decades of energy independence and paved
the way for it to become a natural gas exporter.
But it wants to avoid so-called "Dutch disease" whereby a
sudden explosion in national wealth overheats the currency and
undermines export industries.
"Every year, ongoing profits from investments of the fund
will be allocated for social-economic-educational purposes, to
be decided by the government," the Finance Ministry said in a
"In addition, money from the fund will help, when needed, to
deal with extraordinary events that could hurt the state's
economy, such as war or an earthquake."
Management of the fund's assets and investments will be
carried out by a department to be set up within the Bank of
Israel. The finance minister will head up the fund's board that
will determine its investment policy and monitor its
The Tamar and Leviathan gas fields were found in 2009 and
2010 with combined estimated reserves of over 26 trillion cubic
feet and sparked an exploration frenzy off Israel's coast.
Other fields could be found and government officials have
said revenues could reach $130 billion by 2040.
Major profits are expected to start rolling in only after
Leviathan, the world's largest offshore find of the past decade,
begins production around 2017.