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Wed 1 Dec 2010 11:44 PM

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Gulf SWFs back Morocco tourism fund

Investors are Bahrain's Mumtalakat, Kuwaiti Investment Authority, Qatar Investment Authority and Al Maabar UAE

Gulf SWFs back Morocco tourism fund
TOURISM FUND: The contribution of the four partners is of at least 15 billion dirhams (Getty Images)

Three Gulf Arab sovereign wealth funds and UAE based property developer Al Maabar have raised $1.77 billion for a tourism fund that aims to put Morrocco among the world's top 20 destinations.

Omar Bennani, who heads state controlled Moroccan Touristic Engineering Company (SMIT), said the four investors were Bahrain's Mumtalakat, the Kuwaiti Investment Authority (KIA), Qatar Investment Authority (QIA) and Al Maabar of the UAE.

Bennani told Reuters in an interview on Wednesday: "The contribution of the four partners is of at least 15 billion dirhams. They are committed to support us throughout the next 10 years."

He said the investors did not want their individual contributions to the Moroccan government backed fund be made public. The fund aims to attract 100 billion dirhams in investment.

The fund will finance resort developments in Morocco that aim to more than double tourism receipts to 150 billion dirhams by 2020.

Bennani was speaking after the four sovereign wealth funds signed partnership agreements with Moroccan authorities.

Tourism Minister Yassir Znagui told reporters the Moroccan government would contribute 15 billion dirhams to the new fund.

Znagui said Moroccan authorities could consider bond issues to raise about another 70 billion dirhams.

Znagui said in Marrakesh: "We will run an international roadshow to raise the rest of the money required by the new fund."

He did not however specify the identity of the potential issuer. He said: "We are encouraged by our recent success through the eurobond issue."

Morocco sold a 10 year 1 billion euro denominated bond in September. The issue was priced at 200 basis points over mid swaps, at the tight end of yield guidance.

After the issue which was Morocco's biggest ever, Finance Minister Salaheddine Mezouar said the country is looking to issue Eurobonds more frequently.

Demand has been soaring for emerging market debt in recent months as the sector is relatively stable and offers high yields compared with the developed world. (Reuters)

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