KUALA LUMPUR, 18 May 2009: The federal government will gain from the success of the Terengganu Investment Authority (TIA) as it will receive 10% from the net profit of TIA, Prime Minister Datuk Seri Mohd Najib Razak said today.
He said this while responding to a question on the rationale of the government’s guarantee for the TIA’s RM5 billion fund.
The Minister of Finance Incorporated has a 10% share of TIA’s annual profit.
Stating this as a good decision in terms of the true spirit of partnership with the Terengganu state government, Najib said the move would help the state government and also boost the country’s economy.
“It will allow the additional RM11 billion to be invested not only in Terengganu but the whole country. So, it will stimulate the national economy and also leverage on that by bringing foreign direct investments over RM11 billion,” he said after chairing the Barisan National supreme council here.
TIA, which was set up in February 2009, will have an initial fund size of RM11 billion, with RM5 billion to be raised from the capital market on the back of a government guarantee and the remainder to be raised through the assignment to TIA of some of the future oil royalties due to the state government.
In a separate statement, TIA said it has identified several immediate strategic partnerships and would team up with well-known sovereign wealth funds in projects related to the tourism, energy and agriculture sectors.
“TIA intends to invest in high-impact, strategic projects in Terengganu, other parts of Malaysia, and in regional and international projects that provide positive spill over benefits to Terengganu,” said its chief executive officer Shahrol Halmi.
The setting up of TIA, the country’s first state-established sovereign wealth fund to manage the long-term oil royalty revenue, was mooted by Yang di-Pertuan Agong Tuanku Mizan Zainal Abidin.
Tuanku Mizan will also be the first chairperson of the TIA board of advisors.
The board will also receive advice on investments from an economic advisory panel which includes Employees Provident Fund (EPF) chief executive officer Datuk Azlan Zainol and Felda Holdings’ managing director Mohd Bakke Salleh. — Bernama