Libya and Trump administration discussed sharing billions of dollars in frozen funds sources say

Libya’s Tripoli-based government and the US have held talks about sharing billions of dollars in frozen Libyan state assets if the Trump administration helps unlock the funds, two sources familiar with the secret discussions told Middle East Eye.

The Trump administration would help in unlocking around $30bn, which have been frozen since the former Libyan leader Muammar Gaddafi was toppled by a Nato-backed uprising, a western official and one Arab source familiar with the talks told MEE.

In exchange, the US would obtain around $10bn to reinvest in Libya, eyeing infrastructure and energy projects, the sources said, speaking on condition of anonymity.

US companies Halliburton and Honeywell International both announced energy projects in Libya in 2023, but they have been slow to develop. 

The proposal was raised by the Tripoli-based government headed by Prime Minister Abdul Hamid Dbeibeh when a delegation of US officials visited Libya in early 2025.

New MEE newsletter: Jerusalem Dispatch

Sign up to get the latest insights and analysis on Israel-Palestine, alongside Turkey Unpacked and other MEE newsletters

The plan caught the Trump administration’s interest, and follow-up discussions have taken place, the sources said.

MEE contacted the US State Department for comment but did not hear back by the time of publication.

The sources said Massad Boulos, Trump's senior adviser for Africa and the Middle East, discussed the plan with Libya’s national security advisor Ibrahim Dbeibeh in Doha, Qatar, at the end of April.

Boulos has been using Qatar as a base to negotiate a peace deal between Congo and Rwanda.

That deal, which has been heralded as a breakthrough, would see the US and western companies invest billions of dollars in mines and infrastructure projects in the two countries.

Boulos did not respond to MEE's request for comment. 

Pitching to Trump's transactional nature

Libya’s sovereign wealth fund was established by Gaddafi in 2006 to manage the wealth of the country with the largest oil reserves in Africa. The fund is believed to be worth $70bn. Some assets are in the US, but according to experts, most are in Europe.

In 2011, the Obama administration froze around $30bn in funds under US jurisdiction. Shortly after, the UN Security Council imposed a full freeze that still stands today.

Jalal Harchaoui, a Libya expert at the Royal United Services Institute for defence and security studies, said Dbeibeh’s government has been raising the issue of freeing the funds more regularly. He said there could be around $20bn inside the US.

“There is a big push, and it’s a successful push,” he told MEE.

“I sense that within the Trump administration, this is something they would want to do, but in general, there is a global momentum to unfreeze the funds,” he told MEE.

Tripoli already had one early success.

In January 2025, the UN Security Council reformed sanctions on the sovereign wealth fund, allowing it to reinvest the returns of frozen cash reserves in low-risk investments with “appropriate financial institutions”.

The sources said Dbeibeh's government wants full access to the funds with the Trump administration's help. 

The US is still trying to assess the Libyan proposal, but it would be in keeping with the Trump administration’s business-first, transactional approach to foreign policy.

The US struck a deal with Ukraine in April that gives it access to critical minerals. The deal established an investment fund overseen by both countries that will guarantee the US the first right of refusal to any reconstruction projects once the war with Russia is over. 

Trump is interested in critical minerals in Africa. He has also singled out Egypt for a deal, asking Cairo to allow US vessels free passage through the Suez Canal.

Meanwhile, Syria’s embattled new government has tried to entice the US with the promise of energy deals.

Libya's divisions fester

Libya has been riven by war since Gaddafi’s removal and death in October 2011. 

The country is divided into two, with an internationally recognised government in Tripoli led by Dbeibeh and a government in the east led by former general Khalifa Haftar.

The two sides fought a bloody war in 2019 that saw Haftar try to conquer Tripoli. The fighting devolved into a proxy battle with Turkey backing the UN-recognised government and Russia, Egypt, and the UAE supporting Haftar.

Both sides are jockeying for influence and access to Libya’s oil riches.

Dbeibeh was sworn in as president in 2021 with a mandate to lead a transition government and usher in democratic elections. The vote never took place. Backed by powerful militias, Dbeibeh has clung to power.

Meanwhile, Haftar continues to rule in the East.

Although fighting has largely stopped, Libya is still plagued by violence. Earlier this week, the UN said it was investigating the abduction of a member of parliament in eastern Libya. Dbeibeh’s government blamed Haftar, but his government says Tripoli made the abduction.

Tripoli's offer could be a move to peel the Trump administration away from the Haftars. Boulos and US diplomat Tim Lenderking hosted the elder Haftar's son, Saddam, at the State Department last week. Boulos is the father-in-law of Trump's daughter Tiffany. 

The Tripoli government’s authority over the sovereign wealth fund is relatively undisputed, but giving it full access to the fund’s billions with the country divided and no election scheduled would likely provoke backlash from the international community and Libyans. It would also raise concerns about corruption without reforms at the fund. 

The sources told MEE they did not believe the Trump administration was leveraging holding elections in Libya to help free the funds.

According to the International Crisis Group, the true value of Libya’s sovereign wealth fund is difficult to calculate. It says roughly $70bn is spread out between cash deposits, stocks, and real estate.

Libya’s central bank holds about $17-20 bn in the country's sovereign wealth fund assets in foreign accounts. In its latest report, the International Crisis Group could not confirm whether those funds are part of the roughly $33bn under sanctions or separate. 

middleeasteye.net