PENANG: The Penang state government yesterday sent a proposal and letter to Prime Minister Datuk Seri Najib Tun Razak office, seeking the approval from the federal government a guarantee of RM5 billion for the creation of Penang Sovereign Wealth Fund.
Chief Minister Lim Guan Eng said the fund to be known as Penang Investment Authority (PIA) shall be capitalised at RM5 billion, to be raised via an Islamic Bond issuance, fully guaranteed by the federal government.
a�?PIA is something similar to the Terengganu Investment Authority (TIA), where the fund is to be given to Penang to carry out the statea��s high-impact economic projects with high-end value,a�? he told reporters after receiving a courtesy call from a delegation comprising members of the Thailand Senate Committee of Foreign Affairs yesterday.
TIA, which was set up in February this year, 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 Terengganu state government. Lim said if the federal government can guarantee support of the PIA with RM5 billion, the state government was confident of raising another RM5 billion.
a�?With RM5 billion guarantee from the federal government, we believe we can raise another RM5 billion to carry out infrastructure works, research and development and education projects for Penang.
a�?We are not asking for another RM11 billion, we are only asking for RM5 billion guarantee from the federal government,a�? he said. a�� Bernama