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 statement.
"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 implementation.
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.
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