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||21 July 2009
Abu Dhabi to invest $1b in Malaysia
Malaysia Prime Minister Najib Razak has announced a major initiative by the Abu Dhabi government, through a sovereign wealth fund it wholly owns, to make a $1 billion investment in Malaysia in the energy, real estate and hospitality sectors, state news agency Bernama reported.
Najib said the proposed investment would be carried out in partnership with a new Malaysian sovereign wealth fund to be known as "1Malaysia Development Berhad" (1MDB), which is the result of the government's decision to expand the Terengganu Investment Authority (TIA).
Najib was speaking to Bernama Monday night after talks with Abu Dhabi Crown Prince General Sheikh Mohammed bin Zayed Al-Nahyan, during a brief stopover in the Emirate of Abu Dhabi en route to Kuala Lumpur after visiting Egypt and Saudi Arabia earlier.
"I had a very productive meeting with the Crown Prince. He has agreed that Abu Dhabi, through its sovereign wealth fund, increase its investments in Malaysia starting with a fund of $1 billion," said Najib, who is also Finance Minister.
Sheikh Mohammed is chairman of the Mubadala Development Company which, since its establishment in 2002, represents the main investment vehicle for the government of Abu Dhabi to achieve sustainable social and economic benefits for the emirate.
Abu Dhabi's proposed investment ties in neatly with Najib's recent announcement to liberalise conditions for foreign investors and woo investments to help the economy recover faster from the global and regional slowdown.
Najib said: "We're going to identify sectors that they can co-invest with our sovereign wealth fund, especially in areas like energy, real estate and hospitality."
Malaysian leader said 1MDB would be a fund created on the basis of transforming the TIA into a federal-based sovereign wealth fund instead of a state-based entity.
"I've had discussions with the Yang di-Pertuan Agong (DYMM Tuanku Mizan Zainal Abidin). His Majesty has consented for the TIA to be restructured and federalised to become 1MDB which will be wholly-owned by the Ministry of Finance, reporting directly to the Prime Minister," said Najib.
The prime minister said the Malaysian Cabinet had also given its approval in principle for the TIA to be federalised.
"We'll be issuing further details in the coming weeks," said Najib who was joined by his wife Datin Seri Rosmah Mansor at a private dinner with Sheikh Mohammed, who is also Deputy Supreme Commander of the United Arab Emirates' Armed Forces, at the Emirates Palace hotel.
In a statement obtained by Bernama, the Prime Minister's Office said 1MDB would drive sustainable, long-term economic development for Malaysia by forging strategic global partnerships and promoting foreign direct investment for Malaysia to further enhance the multiplier effects for the Malaysian economy.
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