Business Times, January 12, 2010
By Hamisah Hamid
1Malaysia Development Bhd and State Grid Corp of China will set up a joint-venture company to pursue projects that would generate US$11 billion worth of economic value.
Goverment-owned strategic development company 1Malaysia Development Bhd (1MDB) has teamed up with power transmission and distribution company State Grid Corp of China (SGCC) to undertake multi-billion-ringgit projects in Sarawak that would generate US$11 billion (RM36.6 billion) worth of economic value.
Both sides will set up a joint-venture company to pursue various projects in the Sarawak Corridor of Renewable Energy (Score), with the aim of being major investors in the Corridor.
"It is imperative that these proposed projects are attended to with the utmost sense of urgency by our relevant agencies," Prime Minister Datuk Seri Najib Razak said when officiating at the 1MDB corporate office in Kuala Lumpur yesterday.
Also present were Sarawak Chief Minister Tan Sri Abdul Taib Mahmud, Minister in the Prime Minister's Department Tan Sri Nor Mohamed Yakcop, SGCC president and chief executive officer Liu Zhenya and 1MDB chairman Tan Sri Che Lodin Wok Kamaruddin.
Najib, who is also 1MDB advisers board chairman, later witnessed the signing of a cooperation framework agreement between 1MDB and SGCC.
The amount of investments from both sides were not revealed but it is understood that they will firm up the investments once the joint-venture company is established.
Najib said the entry of SGCC, which reported over US$160 billion (RM533 billion) revenue and US$273 billion (RM909 billion) assets last year, and its significant investment in Score will pave the way for more substantial investments from China and globally into Malaysia.
"I believe SGCC's confidence in Sarawak will inspire even more confidence in Malaysia as the preferred investment destination among global investors," he said.
With 1.5 million people on its payroll, SGCC - the world's largest utility company - is ranked 15 in the 2009 Fortune Global 500.
Score, which represents the new economic model for Sarawak, currently has planned projects worth US$24 billion (RM80 billion).
During Najib's visit to Middle East last year, 1MDB entered into a US$2.5 billion (RM8 billion) partnership with Saudi Arabia's PetroSaudi International Ltd. 1MDB will inject US$1 billion (RM3.3 billion) in the fund while the rest will come from PetroSaudi.
Najib said 1MDB has built enough trust among its global network to give it the extra edge to forge strong partnerships that can attract foreign investments.
He said in today's highly competitive global economy, the sum of all physical incentives such as tax cuts, good location, logistics support, manpower and political stability are not enough to produce the added advantage.
"In these days, trust is paramount. And trust is earned when individuals working together develop a clear understanding of each other's role, confident that everyone will deliver as promised without any hidden agenda," he said.
According to him, 1MDB embodies the 1Malaysia principle in unlocking potential of the younger generation as there are many young Malaysians returning from abroad to serve the country through 1MDB.
Meanwhile, Liu said 1MDB is SGCC's important partner in Malaysia.
"The Chinese government is very supportive of Chinese enterprises' involvement in the infrastructure projects in Malaysia in a more extensive way," he said.
In recent years, trade and cooperation in energy and infrastructure sectors between both countries have increased significantly, he added.