Billions to be invested in two projects

By YVONNE TAN yvonne@thestar.com.my Oct 9, 2010

Sealing the deal: Najib and Khaldoon looking on as 1MDB chief executive officer Shahrol Halmi (right) exchanges the collaboration agreements with Mubadala Development chief operating officer Waleed Al Mokarrab Al Muhairi in Putrajaya yesterday.
PUTRAJAYA: Billions of ringgit in investments are in the pipeline from Abu Dhabi, and are set to flow into two major projects in Kuala Lumpur and Sarawak.
The emirate’s investment unit, Mubadala Development Co, is teaming up with the Government-owned 1Malaysia Development Bhd to participate in property and aluminium ventures in the two areas.
At the signing of two agreements yesterday, Prime Minister Datuk Seri Najib Tun Razak said the first would pave the way for Mubadala’s involvement in the Kuala Lumpur International Financial District (KLIFD) real estate development, which is estimated to cost more than RM26bil.
In the second tie-up, Najib added, Mubadala, through Mubadala Industry, was looking to commit up to US$7bil (RM21.7bil) in long-term projects in the Sarawak Corridor of Renewable Energy (SCORE).
“We are happy that 1MDB and Mubadala see each other as partners in driving strategic initiatives for the long-term sustainable economic development of their countries,” he said.
Mubadala Real Estate and Hospitality (MREH) has agreed to work with 1MDB to explore the potential joint development of key strategic projects within the 34ha KLIFD, near Jalan Tun Razak.
“The full scope of MREH’s participation in the projects to be located within the KLIFD will be finalised in 2011, following completion by 1MDB of the KLFID master plan,” Mubadala and 1MDB said in a joint press statement.
KLIFD will provide a state-of-the-art home for important banking and financial entities.
It is meant to further cement Malaysia’s position as a leader in global Islamic finance.
“The KLIFD is critical in the development of a globally competitive financial sector that will promote economic growth, attract foreign direct investment and create jobs,” Najib said.
“We will invite, encourage and persuade the local and international financial community to work with us, not only in shaping Kuala Lumpur as a global financial centre but also to benefit from what the KLIFD has to offer.”
Najib said the potential investment in SCORE, which is for the development of a major initiative in the aluminium sector based on hydro power, was expected to generate spillover economic activities in multiple sectors and create more than 10,000 jobs during construction and 2,000 specialist jobs.
Specific details of these projects, all of which would be led by 1MDB, would be available in due course, he added.
Mubadala and 1MDB said they were starting preliminary assessment work on the SCORE project.
In his speech, Mubadala chief executive officer and managing director Khaldoon Khalifa Al Mubarak said Abu Dhabi viewed Malaysia as an ideal investment platform linking the emirate to this region.
“The Abu Dhabi government is very optimistic about Malaysia’s prospects as an investment destination of choice,” said Khaldoon, who is also special envoy to the Crown Prince of Abu Dhabi and deputy supreme commander of the UAE Armed Forces.
At the same event, Najib, who is also chairman of the board of advisers of 1MDB, announced that 1MDB posted a net profit of RM425mil for its first financial year ended March 31.