Kuwait’s sovereign wealth fund will invest 500 million euros ($676 million) in Italian companies in co-ordination with Italy’s own strategic investment fund.

The deal follows similar agreements with Qatar’s investment fund last year to invest in Italian companies operating in the fashion, food and tourism sectors and a separate deal with the Russian Direct Investment Fund.

Kuwait and Italy will create a company with capital of 2.5 billion euros, of which 80 per cent will come from Italy’s strategic investment fund, the FSI, and the remainder from the Kuwait Investment Authority.

“This is an extraordinarily important development, it’s an injection of confidence in our country,” Italian Prime Minister Enrico Letta said yesterday at a news conference in Kuwait during a visit to the Gulf states to attract interest in Italy as an investment destination.

The FSI said the deal would be signed formally in March.-Reuters