Egypt government approves proposal to set up sovereign investment fund

CAIRO, June 11 (Reuters) - The Egyptian government said on Thursday it had approved a proposal to set up a sovereign investment fund to support economic development through returns on the state’s assets and resources.

The fund, called Amlak, will be state-owned through the National Investment Bank. It will act as the state’s investment arm and aim to encourage diversification and support sustainable economic and social development, the cabinet said in a statement.

The state “would not manage these investments directly”, according to the statement, citing the planning minister.

“The aim is to set up a highly effective investment fund that is able to participate with financial institutions and sovereign Arab and international funds in mega-projects”, the planning minister said.

The statement did not give details on when the fund would be created or how much money it would manage.

A 2011 uprising that toppled Hosni Mubarak hit the country’s economy hard, discouraging investors and tourists and slashing growth to below 2 percent in the 2010/2011 fiscal year.

Egypt’s current government has since embarked on a series of reforms and hosted a high-profile investment conference in March where deals worth some $32 billion were signed.

Economic growth has begun to pick up and shaky state finances are strengthening since former army chief Abdel Fattah al-Sisi became president in 2014, overseeing the implementation of some economic reforms while securing aid and investment from rich Arab Gulf allies.

Writing by Yara Bayoumy; Editing by Larry King