1Malaysia Development Berhad (1MDB) is a strategic development company, wholly owned by the Government of Malaysia. 1MDB was established to drive strategic initiatives for long-term economic development for the country by forging global partnerships and promoting foreign direct investment. 1MDB is currently involved several high-profile projects such as the Tun Razak Exchange, Tun Razak Exchange’s sister project Bandar Malaysia and the acquisition of three Independent Power Producers.
1MDB began as Terengganu Investment Authority (TIA), a sovereign wealth fund aimed at ensuring economic development for the state of Terengganu that is long term and sustainable while safeguarding the economic well-being of the people of Terengganu.
TIA was established in 2008, and was renamed 1Malaysia Development Berhad on January 2009. In his announcement on July 22, 2009, Prime Minister Najib Razak said the decision to expand TIA into a federal entity was made to enable its benefits to reach a broad spectrum of Malaysians rather than to the residents of only one state.
1MDB focuses on strategic development projects in the areas of energy, real estate, tourism and agribusiness.
On September 30, 2009, 1MDB and its strategic partner PetroSaudi International Limited announced the setting up of a US$2.5 billion joint venture company, aimed at spearheading the flow of foreign direct investment from the Middle East into Malaysia.
Following that, on January 11, 2010, 1MDB signed a cooperation framework agreement with the State Grid Corporation of China (SGCC), with the intention to undertake various energy-based projects in the Sarawak Corridor of Renewable Energy (SCORE) and subsequently become major investors in SCORE.
On January 18, 2010, 1MDB signed a cooperation agreement with Abu Dhabi Future Energy Company (also known as Masdar) to explore clean technology projects and investments, including the possibility of building Malaysia’s first carbon-neutral city.
On May 13, 2010, 1MDB as part of a consortium of companies, will jointly undertake a multi-billion-ringgit redevelopment project on the Sungai Besi old international airport, which is now the base for the Royal Malaysian Air Force. The site covers 162 hectares and is planned to be developed into an Islamic financial centre and will include Qatar Investment Authority (QIA) as a partner. This project is dubbed the City of Malaysia. About the same time, 1MDB and QIA had signed an MOU to assess the viability of energy and real estate investments. In the MOU, QIA also proposed to invest US$5bil.
On May 21, 2010, it was reported that 1MDB will jointly develop the Tun Razak Exchange project at a currently vacant piece of land covering 34.4 hectares in the city of Kuala Lumpur with Mubadala Development Company. Nevertheless, the ground-breaking ceremony which was supposed to be held on May 29, 2010, was called off and postponed indefinitely at the last minute. During his speech on Tenth Malaysia Plan, Najib Razak identified the KLIFD and City of Malaysia projects as two of many public-private partnership projects which will help drive the nation’s transformation agenda.