ABU DHABI MULLS US1 BLN INVSTMENT IN MALAYSIA

By Abdul Muin Abdul Majid

ABU DHABI, July 21 (Bernama) -- Prime Minister Najib Razak has announced a
major initiative by the Abu Dhabi government whereby a sovereign wealth fund it
wholly owns is set to make a US$1 billion investment in Malaysia in the energy,
real estate and hospitality sectors.

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
east coast state of 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 US$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."

Elaborating, the 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 King 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 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.

To a question, Najib said 1MDB was in the process of being finalised and he
expected it to be up and running "very soon".

The prime minister had earlier presided over a dialogue session with
representatives from Malaysian companies operating in the United Arab Emirates
which was also attended by Malaysian ambassador to the UAE Yahaya Abdul Jabar
and consul-general in Dubai Syed Mohamad Hasrin Tengku Hussin.

Najib told Bernama that he was pleased with the companies' achievements
thus far.

"And I mentioned this to the Crown Prince, that the Malaysian companies
have a level of comfort being present here.

"All they want is an opportunity to participate in bidding on a level
playing field, and they're looking at new opportunities in Abu Dhabi," he
said.

He said Sheikh Mohammed had mentioned that Malaysian companies had done well
in Abu Dhabi, singling out the Malaysian firm involved in the construction of
the Formula One circuit in Abu Dhabi -- WCT Engineering.

"I'm confident that they will continue to do well in this country," added
Najib.

He and his entourage later left for the airport to catch their flight home.
-- BERNAMA