Libya will invest $100 million in Niger, in a move towards strengthening ties with uranium-producing neighbour, whose military rulers intend to hand power to a civilian government after an election early next year.

'Libya has decided to increase the volume of its investments in Niger,' Libyan Prime Minister Baghdadi Al Mahmoudi said during a visit to meet Niger's junta chief Major Salou Djibo.

'I am announcing the creation of an investment fund with $100 million,' he said, without specifying which industries Libya was keen to invest in.

In June, Libya said it would allow almost 300 prisoners from Niger to return home. Earlier that month, Libya signed an agreement on judicial cooperation with the military junta running the West African country.

Major investors in Niger, one of the world's poorest countries and one which struggles with food shortages, include French nuclear energy firm Areva and China National Petroleum Corporation.

Djibo became junta chief after soldiers overthrew the government of President Mamadou Tandja in February. Tandja had become increasingly unpopular after altering the constitution with measures intended to strengthen his grip on power. – Reuters