Thursday, June 17, 2010

Greece seeks investments from Libya

By Kerin Hope [Financial Times] in Athens -- Published: June 8 2010

George Papandreou will travel to Libya today for talks with Muammer Gaddafi on possible investments in Greece as ­Athens struggles with its debt crisis.

The Greek prime minister will discuss potential investments by Libya’s sovereign wealth fund and its state-owned energy groups with the country’s leader, officials said.

Mr Papandreou hopes to revive a family friendship with Colonel Gaddafi that flourished while his father, Andreas, was prime minister during the 1980s.

“These are exploratory talks, nothing will be signed on this visit... but it opens the way ahead,” one Greek official said.

The Greek delegation is counting on a warm welcome in Tripoli following an invitation extended during a visit to Athens last month by Ali Baghdadi Ali al-Mahmudi, the Libyan prime minister.

Mr Mahmudi said Libya planned to spend as much as €200bn ($239bn, £165bn) on “a huge leap in development... and our relations with Greece will also see a huge development”.

Mr Papandreou is leading the country’s drive to attract investment from the Gulf states and other oil and gas producers. Energy and shipbuilding projects involving Qatari and Abu Dhabi investors are under discussion.

The investment drive was stepped up after Greece failed this year to persuade Gulf and other sovereign wealth funds to buy sizeable chunks of its debt. Greek public and private investment is projected to shrink significantly this year, as the terms of the country’s €110bn bail-out by its eurozone partners and the International Monetary Fund call for a sharp fiscal tightening.

The economy is set to contract by about 4 per cent this year and another 1.5-2 per cent in 2011, according to projections.

Mr Papandreou will propose several energy projects involving solar power and natural gas that could be launched this year, the Greek official said.

Joint ventures in tourism – an industry Libya is seeking to develop – and food production, including fish farming, would also be discussed.

OTEGlobe, a subsidiary of the Greek public telecoms operator OTE, and Libya International Telecommunications Company, on Tuesday announced a project to lay an undersea fibreoptic cable between Derna in Libya and the island of Crete.