Dubai: Mubadala Development Company, an Abu Dhabi Government investment arm, yesterday said it has signed two agreements on a strategic partnership with 1Malaysia Development Berhad (1MDB), a Malaysian Government undertaking, that could lead to an investment of up to $7 billion (Dh25 billion) for the development of a major initiative in the country.
1MDB Chief Executive Officer Shahrol Halmi and Mubadala Chief Operating Officer Waleed Al Mokarrab Al Muhairi signed the agreement for their respective companies in the presence of Malaysian Prime Minister Dato' Sri Mohammad Najib Tun Haji Abdul Razak and Khaldoon Khalifa Al Mubarak, Chairman of the Executive Affairs Authority of the Government of Abu Dhabi and Chief Executive Officer and Managing Director of Mubadala.
"The agreements have been signed with Mubadala Real Estate and Hospitality (MREH) and Mubadala Industry (MI). MI has agreed to assess the viability of an investment of up to $7 billion for the development of a major initiative in the aluminium sector based on hydro power in the Sarawak Corridor of Renewable Energy (Score)," Mubadala said in a statement.
"The two state-owned companies are starting preliminary assessment work on the project, which will create more than 10,000 jobs during construction and another 2,000 specialist jobs."
The opportunities in the corridor also lie in its huge energy resources — 28,000 megawatts of hydropower, 1.46 billion tonnes of coal, and 40.9 trillion square cubic feet of natural gas that will allow Sarawak to price its energy competitively and encourage investments in power generation and energy-intensive industries. China has already signed up for $11 billion in Score.
If realised, this would be the single largest UAE investment in Malaysia. The move reflects a shift to the East by Gulf investors.
Excellent infrastructure
"The opportunities now lie in emerging markets, mostly in the Far East and the move by Mubadala reflects that shift," business analyst Jitendra Gianchandani, Chairman of Jitendra Group, told Gulf News.
"Malaysia has a stable government. Its infrastructure is excellent and the country has a young and educated population. Inflation is less than 4 per cent. I think this is a good move by Mubadala to diversify investments in different geographical areas," he said. "As the opportunities lie in the emerging markets, especially in the Bric (Brazil, Russia, India and China) countries and the Far East and the Middle East region, the Gulf's investors will do well in investing in these regions that could ensure faster and better return on investment.
"Through this, the sovereign wealth funds of the GCC will do well to recover from the losses made earlier in the West, by investing in the emerging markets."
1MDB is a wholly-owned subsidiary of Malaysian federal government and has already received $5 billion investment pledge from Qatar Investment Authority.
Earlier, Masdar, a Mubadala subsidiary that is developing a $22 billion Greenfield carbon neutral project, Masdar City, signed a MoU with 1MDB to develop Malaysia's first carbon neutral city.
