Palestinian Deals Go On Despite Boycott.

The Palestine Investment Fund (PIF), the main investment vehicle controlled by Palestinian Authority (PA) President Mahmoud Abbas of Fatah, is forging ahead with international deals in spite of a Western boycott of the Hamas-run government. On Nov. 25 the FT quoted the PIF CEO and economic adviser to Abbas, Muhammad Mustafa, as citing telecommunications, gas and power supplies as areas where recent progress had been made. Mustafa said BG, formerly British Gas, was close to securing a foreign buyer for natural gas from a Gaza Strip offshore field. He said BG, which has the concession to develop the Gaza field with a stake held by the PIF, hopes to reach agreement within the next few months. The Israeli government is known to be eager to secure further gas supplies and, in contrast to the policy of Ariel Sharon, the former prime minister, no longer rules out a deal with the Palestinians.

The PIF has helped secure new electricity inter-connection agreements between the Palestinian territories, Egypt and Jordan. Kuwait's Wataniya Telecom recently won the second mobile telephone licence in the territories. Under the deal, a new mobile company will be formed by Wataniya, with 30% to be held by the PIF and another 30% floated on the Palestine Stock Exchange (PSE).

Mustafa said the PIF hoped to start services next year but that was dependent on gaining access to frequencies controlled by Israel. Wataniya won a tendering process with a bid of $357m (273m), which could be paid through the PA president's office if there is no new government.

The PIF was formed in 2002 to bring greater transparency to investments previously under the control of Yasser Arafat, the late Palestinian leader.

Mustafa, a former World Bank official and economic reform adviser to Kuwait and Saudi Arabia, has headed the PIF for almost a year. He refused to say how much the fund was worth, saying it consisted mostly of shareholdings in local and regional companies but that these were heavily collateralised to cover loans taken out by the previous, Fatah-run government. Reports previously valued the fund at some $1.4 bn.