KUALA LUMPUR (May 28): Retirement Fund Inc (KWAP) will invest up to RM3 billion in shariah-compliant assets through Dana Pemacu, Prime Minister Datuk Seri Anwar Ibrahim said on Tuesday.
The investments by KWAP, as the fund is commonly known, aim to support high-growth domestic companies, and catalyse the venture investment ecosystem, Anwar said in his keynote address at the Global Forum on Islamic Economics and Finance.
The investments will be part of the RM6 billion Dana Pemacu run by KWAP and executed through separately managed account funds in partnership between local and international investment managers across private equity, infrastructure, and real estate asset classes.
Dana Pemacu will be Malaysia-focused private equity investments, targeting key economic sectors including food security, education, silver economy and healthcare, energy transition, digital economy, financial inclusion, and other impact-related critical themes, KWAP said in a separate statement.
“Our plan is to deploy this investment through the creation of partnership models between local talents and international fund managers, which will serve to catalyse the private market investment ecosystem in Malaysia,” said KWAP chief executive officer Datuk Nik Amlizan Mohamed.
Greening halal business
Meanwhile, to assist halal businesses in Malaysia to transition to greener and sustainable practices, Anwar said the Islamic Development Bank, Bank Negara Malaysia and the World Bank have collaborated to introduce a pilot programme on Greening Halal Business.
The programme will include technical capacity building, tools to measure and report greenhouse gas emissions, and transition financing including certifications, he noted. The government is expected to finalise a new type of sukuk issuance in the structure of ‘wakalah bil-khadamat’ by 2025, Anwar said.
“Innovation in the halal sector should be a prime focus to enhance the efficiency and transparency across the end-to-end supply chain,” he stressed.
The Securities Commission will also establish Malaysia’s first so-called Social Exchange that would allow participation of private capital in projects with positive social outcomes, Anwar said.
“This will benefit entities such as NGOs (non-governmental organisations), social enterprises and state Islamic religious councils,” he said. “The Islamic finance ecosystem needs to evolve progressively, placing greater emphasis on value-based finance, transcending the profit-driven motives.”
Anwar urges OIC to step up trade, investments
Anwar also urged the Organisation of Islamic Cooperation (OIC) to “up the ante” and facilitate cross-border access to beef up innovation, trade and investments.
He pointed out that the global Islamic trade finance represents only less than 5% of the total trade by OIC member countries.
Malaysia plans to implement government-to-government facilitation leveraging Islamic trade finance, “for a portion of economic cooperation between the OIC countries”, he continued, which will “help turbo-charge the growth of the Islamic economy”.