Published: Wednesday September 30, 2009 MYT 12:45:00 PM
Updated: Wednesday September 30, 2009 MYT 12:51:02 PM

Malaysia, Saudi Arabia form US$2.5b joint venture

KUALA LUMPUR: Malaysia and Saudi Arabia have entered a new era of economic cooperation with the setting up of a US$2.5bil (RM8.7bil) joint-venture company that will spearhead the flow of foreign direct investments from the Middle-East as well as make strategic investments in high-impact projects in Malaysia.

The joint-venture company is the result of a partnership between 1Malaysia Development Berhad (1MDB) and PetroSaudi International Limited (PSI).

This venture is the first undertaken by PSI in this region and underscores the confidence Saudi Arabia has in Malaysia and economic prospects here, the two companies said in a joint statement on Wednesday.

Details of the joint venture is expected to be announced later Wednesday.

1MDB, wholly-owned by the Malaysian Government, was established recently to drive strategic initiatives for long-term sustainable economic development and promote inflow of Foreign Direct Investments (FDIs) into the country.

PSI, based in Al-Khobar, Saudi Arabia, is mandated to carry out investments that can strengthen relations between Saudi Arabia and key countries worldwide.

The joint-venture company’s objective is to seek, explore and participate in business and economic opportunities which result in the enhancement and promotion of the future prosperity and long-term sustainable economic development of Malaysia.

It is expected to actively make investments in the renewable energy sector.

The joint-venture company is also expected to be a vehicle for investments from the Middle-East into the region, thereby giving Malaysia the edge in drawing investments from the cash- and resource-rich region, the companies said in their statement.

PSI chief executive officer Sheikh Tarek bin Essam bin Ahmad said: “Malaysia has long been a model of stability and development for developing countries.

“We believe the recent economic liberalisation policies announced by the Prime Minister will only make Malaysia a more attractive place for investors.

“We envisage Malaysia becoming an important partner for the Kingdom of Saudi Arabia,” he said.

Also lauding the setting up of the joint-venture was 1MDB chief executive officer Shahrol Halmi.

He said: “The joint-venture company is set to further increase FDIs from the Middle-East, in particular Saudi Arabia. We will leverage on PSI’s strong international presence, its networks and expertise to promote Malaysia as the preferred investment destination.”

The joint-venture company will initiate various projects in multiple sectors that are mutually beneficial and in line with 1MDB’s mission to drive long-term sustainable economic development in Malaysia, he said. -- Bernama

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