LAHORE, Nov 1: The United States is in the process of launching a venture capital fund to support new Pakistani companies under its Pakistan Private Investment Initiative (PPII) announced in September to spur job growth and economic development by expanding access of small to medium sized businesses to capital.

“When we talk about venture capital fund under the PPII we are actually talking about tens of millions of dollars that will go into this fund,” Nina Maria Fite, US Consul General in Lahore, said while speaking to Dawn.

“It means the US taxpayers are willing to assume some risks (for the economic development of Pakistan).”

The PPII will generate funds of at least up to $40 million, and seeks Pakistani, regional and international fund managers interested in investing in Pakistan for matching investment and fund management services. The investment funds will make equity investments in new Pakistani companies in specific areas.

“Basically it will be a commercial investment fund. We have done this type of funds in the central and eastern Europe and it has been very successful,” said Nina, who was in London last month to participate in the US-Pakistan investment conference.

The conference brought together many Pakistani exporters and American importers representing major brands.

“We want to encourage bilateral trade, which currently stands at around $5 billion, to find commercial solutions to Pakistan’s development and growth needs,” she asserted, pointing out that her country remains the largest destination of Pakistan’s exports and the largest foreign investor in this country.

“The US is looking at how can Pakistan take better advantage of GSP (generalised system of preferences) in terms of textiles. The Pakistan ministry of commerce is already taking a trade delegation to the US (to explore greater trade cooperation between the two countries.

The US diplomat said both the countries had completed negotiations on Bilateral Investment Treaty (BIT) after eight years of negotiations. “It is a very important step for Pakistan. It is something that improves the image of Pakistan as a destination for investment,” she argued.

The Pakistan government is evaluating the draft treaty, which is ready to be signed as soon as Pakistan completes its internal evaluation. “The treaty provides additional level of security for the US investors. It is now up to the Pakistan government. We are ready to sign it,” she said.

She said quite a number of American companies were operating in Pakistan and many were interested in doing business here.

“Of course, security is the major issue, the major worry of investors. But that is for Pakistan’s people and government to help improve it.”