A US trade promotion agency will invest up to $455 million in five private equity funds in the Middle East and North Africa as part of President Barack Obama's push to boost ties with the Muslim world.

The financing is in response to Obama's speech in Cairo speech last year, in which he said the US would set up a fund to develop technology in Muslim-majority countries, the Overseas Private Investment Corporation (OPIC) said on Thursday.

OPIC said it approved up to $150 million for a fund to be run by a company owned by Kuwait Projects Company (Kipco), Kuwait's largest investment firm, and up to $150 million for a fund managed by Dubai-based Abraaj Capital.

'OPIC has to operate at no cost to the taxpayer so it has to be commercially viable,' said Stephen Everhart, former managing director at OPIC at an event in Cairo.

Kipco, which operates in about 20 countries, said in November it has about $700 million of debts that mature in 2011.

Opic will also invest $100 million in a fund managed by a subsidiary of Egyptian private equity firm Citadel Capital, it said.

Opic, a US government agency whose aims include encouraging economic development in emerging markets and helping US businesses invest overseas, is one of several partners, along with USAid, in the Global Entrepreneurship program Obama launched in  April in Washington.

'It is not aid it is finance. You hire local managers like Abraaj and Citadel to run the money,' said Everhart, who is now the current associate dean of the school of business at the American University in Cairo, the local partner for the Global Entrepreneurship program in Egypt.

The agency said it will put $30 million into a fund run by Ramallah-based Siraj Fund Management Company, aimed mostly at start-ups and small businesses in the Palestinian territories.

Obama pledged in Cairo on June 4, 2009 to hold a summit on entrepreneurship to forge ties between American business leaders and foundations and their counterparts in Muslim-majority countries to create jobs.-Reuters