Published May 20, 2009

M'sia SWF names projects for investment

Tourism, agriculture, and energy sectors will be main focus

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(PETALING JAYA) Malaysia's first state-established sovereign wealth fund, Terengganu Investment Authority (TIA), with an initial fund of RM11 billion (S$4.56 billion), has identified several high-impact investment projects in the tourism, energy and agriculture sectors in the state and around the country, says a report in The StarBiz.

This week, the tabloid said, TIA will raise RM5 billion, which sources say will involve the issuance of Islamic medium-term notes on the back of a Federal Government guarantee, while a further RM6 billion will be 'raised through the assignment to TIA of some of the future oil royalties due to the state', it said in a statement. TIA's current paid-up capital of RM1 million will be raised to RM200 million soon and in due course increased to RM1 billion.

TIA chief executive officer and former executive partner at Accenture, Shahrol Halmi, said the fund had identified several strategic partners and would team up with well-known sovereign wealth funds for these projects, which include regional and international projects that have 'positive spillover benefits' to the state.

'The key objectives of TIA's investment strategy are to generate long-term sustainable and recurring returns and to ensure the development of long-term sustainable economic and social programmes for the state,' he said.

The Mentri Besar of Terengganu (MB Inc) owns 100 per cent of the ordinary shares of TIA with the Ministry of Finance (Inc) and TIA Foundation (it will be set up by early June to fund and implement social benefit programmes in the state and the country) owning one preference share each. The preference share entitles the holder to certain approval rights (including rights to appoint nominees to the board) as well as a 10 per cent share of TIA's annual after-tax profits.

TIA's board of directors will receive investment advice from an economic advisory panel which includes Employees Provident Fund CEO Datuk Azlan Zainol and Felda Holdings Bhd group managing director Datuk Mohd Bakke Salleh.

TIA was set up on Feb 27 after receiving the nod from the Cabinet and state executive council to manage the long-term oil royalty of the state, an idea mooted by Yang di-Pertuan Agong Tuanku Mizan Zainal Abidin after a visit to Abu Dhabi in February last year.

'His majesty wanted to ensure sustainable income for the state long after oil and gas reserves run out,' said the statement.