Qatar to invest €1bn in Italy, set up €2bn JV

REUTERS

DOHA QATAR agreed on Monday to invest as much as €1 billion ($1.3 billion) in Italian companies, aiding efforts by Italy’s Prime Minister Mario Monti to breathe life into a weak economy.

Italy has joined a growing list of European states looking to tap Qatar’s vast wealth to support national industries that are struggling to finance their way out of recession.

A joint venture between Italy’s strategic investment fund and state-owned Qatar Holding will invest in sectors including food, fashion and luxury goods, furniture and design, tourism and leisure, the Italian fund said in a statement on Monday.

The venture will have capital of up to €2 billion ($2.5 billion) provided equally by both partners over the first four years, according to the agreement signed during Monti’s visit to Qatar.

The “IQ Made in Italy Venture” will start with €300 million of capital.

“We have four or five ideas (for investment in Italy) we are studying at the moment,” Prime Minister and Minister of Foreign Affairs HE Sheikh Hamad bin Jassim bin Jabor al Thani said at a news conference without elaborating.

Qatar is also preparing to sign another agreement with Italy worth €1 billion aimed at small and medium- sized enterprises, the premier said, adding that Qatar would participate in half that amount.

Monti’s visit to the Gulf was partly aimed at attracting new investment both for Italian sovereign bonds and for companies which have had serious problems raising capital as the financial crisis has squeezed bank balance sheets and cut off lending.

“It’s significant that Italy now seems to be proactive in attracting long-term institutional investors and this venture with Qatar clearly signals that,” said Rachel Zeimba, senior analyst and sovereign wealth fund expert at Roubini Global Economics in London.

“It is not clear if the investments are restricted to listed companies alone but it proves that Qatar sees long-term value in sectors such as food and fashion in the country and wants to play in on these themes,” she said.

The PM said Monti’s reform drive since taking office a year ago had helped the Italian economy and been an important step in strengthening its overall economic system.

“We believe Italy is a significant partner for Qatar in Europe,” he said.

Monti, called in to head an unelected technocrat government a year ago at the height of the financial crisis, has faced growing speculation about his political future after elections expected in March.

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