Libya has set up a $24-billion fund for investment and local development that will focus on providing housing for its rapidly growing population, the online Oea newspaper reported on Thursday.

In rare unrest, coinciding with a popular revolt in neighbouring Tunisia, Libyan citizens earlier this month occupied hundreds of homes that were still under construction and ransacked the offices of foreign contractors building them.

Quoting Industry and Trade Minister Mohammed Hweji, Oea said the setting up of the fund follows decreases in custom and tax duties on food products and in prices of other staples.

(Hweji) announced the setting up of a new fund for investment and local development with a capital of 29 billion dinars, around $24 billion, Oea said.

The funds will be used for the construction of housing projects ... as part of the development plan currently under execution in Libya, Oea quoted him as saying.

After the home occupations, a government authority in charge of religious affairs had urged preachers in Libya's mosques to warn their worshipers against the kind of disturbances seen at the housing projects, local media reports said.

Despite its vast oil and gas wealth and a relatively small population of 6.5 million, Libya has both the highest demographic growth and unemployment rates in the North Africa region stretching from Egypt to Morocco.

It has been struggling to meet a rapid rise in housing demand from younger citizens, many of whom are embracing modern lifestyles and no longer accept living with their parents.

The government pays public sector employees a housing stipend and authorities have pledged to build 250,000 new houses by the end of 2014. But the delivery of several of these projects have been facing delays.