Sarawak in talks with Norway on forming sovereign fund
Posted on : 13 May 2022  Source of News: The Borneo Post

A handout photo shows Abang Johari (front centre) posing with key officials from Sarawak and Norges Bank.

KUCHING (May 13): Sarawak will engage seriously with Norway in an earnest effort towards the successful formation and management of its own sovereign wealth fund, said Datuk Patinggi Tan Sri Abang Johari Tun Openg.

The Premier of Sarawak said the widely acclaimed success of Norway’s sovereign wealth fund, which has been managed with the highest standard of governance since its inception in 1996, is a standard Sarawak needs to benchmark on.

He said this when meeting ministry and Norges Bank Investment Management officials at the bank’s headquarters in Oslo, Norway yesterday.

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Norway’s sovereign wealth fund called the Government Pension Fund Global, formed to manage the country’s oil money, is managed by the Norges Bank Investment Management.

The fund received its first injection of two billion Kroner from Norway’s government in 1996 and in 2021 reported a total value worth US$1.34 trillion with all investment in equities and real estate outside the country.

Abang Johari’s two-day visit to Norway was part of his week-long itinerary to Europe, which saw him delivering a keynote address at the World Hydrogen Summit and Exhibition 2022 in Rotterdam, Netherlands earlier this week.

The Premier said as Sarawak developed the idea of creating a sovereign fund, the government had benchmarked many similar funds around the world.

“Given the many parallels between Sarawak and Norway, Sarawak is particularly interested in the lessons to be learnt from Norway, given that it has around 25 years’ experience in developing the fund.

“Of great interest to Sarawak, you have the largest global sovereign fund, renowned for good governance practices with clear policies in fund management,” he told Norway’s ministry and bank officials.

Abang Johari said Norway and Sarawak shared many common attributes as they are both large and sparsely populated, as well as blessed with considerable natural resources, particularly oil and gas, and hydropower.

“Sarawak, as the largest constituent territory of Malaysia, is around one-third the size of Norway, with around half the population.

“We also share a common desire to move towards sustainable development, preserving the world for future generations. I have travelled here from the World Hydrogen Summit in Rotterdam, earlier this week.

“Sarawak aims to be the leading territory in Malaysia as far as the Energy Transition is concerned, away from dependency on fossil fuels.

“We note that Norway is leading Europe in this regard, with virtually all your electricity being generated by renewable sources and has one of the highest proportions of electric vehicles in the world,” he said.

The Premier pointed out Sarawak has been a significant producer of oil and gas since 1910, but only recently experienced a significant increase in its revenue from this source.

“Given the energy transition (towards green fuel), we expect that this will be a temporary increase lasting for at most the next generation, or around 25 years.

“As such, I believe that aligned with our desire to develop a multi-generational sustainability strategy for Sarawak, we should not consume all the increased revenues now, but rather put some aside for the benefit of future generations in the form of a sovereign fund,” he said.

Abang Johari said, in the last Sarawak state election, he made it a central part of his party’s manifesto that a sovereign wealth be set up for the benefit of future generations.

“I was happy to see that the people of Sarawak are keen to see this happen – my government was returned with a far higher majority on the basis of our sustainable development plans.

“Today, given your experience and also your demonstrated willingness to make the world a better place, we would like to engage in a dialogue with you in order to understand the lessons you have learnt from developing your fund, to understand the ways in which you have structured and govern the fund, and your recommendations for Sarawak starting on this journey you have so successfully accomplished.

“We would also like to hear from you what your parameters are for investing in places like Sarawak, and what we can do to ensure that we are high up in your list of attractive and ethically sound places to invest part of your fund,” he added.

Among those present were Deputy Premier of Sarawak Datuk Amar Douglas Uggah Embas, Energy and Environmental Sustainability Deputy Minister Dr Hazland Abang Hipni, State Attorney General Dato Sri Talat Mahmood Abdul Rashid, State Financial Secretary Dato Sri Dr Wan Lizozman Wan Omar, and Sarawak Economic Development Corporation chairman Tan Sri Datuk Amar Abdul Aziz Husain.