Oil Report

Libya okays pact with Italy to boost investment

TRIPOLI, March 2 (Reuters) - Libya’s congress ratified on Monday an accord with Italy freeing up $5 billion compensation for Italy’s colonial-era misdeeds and boosting investments which have already seen Libya buy into Italian banking and energy.

Its pariah status lifted, Libya has become a strategic investor in Italy, using its energy wealth to buy into Unicredit CRDI.MI bank and oil company Eni ENI.MI and planning a joint fund with Mediobanca MDBI.MI to invest in Italian companies.

As a sign of Tripoli’s growing importance to Italy, Prime Minister Silvio Berlusconi flew to Libya on Monday to address the General People’s Congress, its equivalent of a parliament.

Berlusconi, due to meet Libyan leader Muammar Gaddafi in his home town Sirte to mark the 32nd anniversary of the Jamahiriya administration, said on leaving Gaza talks in Egypt that the friendship pact “will launch cooperation with Libya in various sectors”.

The pact signed by Berlusconi and Gaddafi last year, which Italy’s parliament ratified last month, involved an apology for the excesses committed in colonial rule from 1911-1943, when Libya says Italian troops killed thousands of its people.

Italy, already Libya’s main European trading partner, must also compensate Libya with investments of $200 million per year over 25 years.

Rome has also been keen to get Libya to help stop the flow of illegal immigrants from its coast across the Mediterranean into southern ports such as the Italian island of Lampedusa.

Libya is emerging from years of sanctions and isolation with ambitions for a larger role in Africa and in European business, via a sovereign wealth fund worth more than $65 billion. (Writing by Lamine Ghanmi and Stephen Brown)