China CIC's role in Malaysia's $3.5bn airport project under doubt

Doubts have emerged over whether China Investment Corporation (CIC) is part of a consortium shortlisted to finance a Malaysian airport project estimated at about €3.3 billion ($3.5 billion). 

A source with direct knowledge of the matter told AsianInvestor that the Chinese sovereign wealth fund is not involved in the airport project.

According to Malaysia-listed electronics company Industronics Berhad’s announcement on December 23, the consortium was shortlisted to finance one of the major infrastructure projects in Malaysia’s Northern Corridor Economic Region, the 9,841-acre Kedah Aerotropolis development project, or the Kedah airport project, located in northwest Malaysia, bordering Thailand.

The consortium consisted of CIC, Industronics and a Hong Kong securities company named Bluemount, according to Industronics' press release.

Industronics has a strategic relationship with the other partner Bluemount, in which it holds a 10% stake.

The source told AsianInvestor that the announcement was inaccurate.

The firm aims to raise Rm1 billion ($227 billion) for its expansion into Southeast Asia. It did not specify how much it will raise from CIC. The source told AsianInvestor that CIC was not involved in supporting TTE Electronics either.

CIC is investigating why there is an announcement on a project they are not involved in, the source said.

CIC did not provide any comments to AsianInvestor at the time of publication.

When asked about the airport project, a spokesperson for Industronics confirmed CIC’s participation, adding that the consortium was shortlisted to provide financing for the project, although how much each entity in the consortium would fund is yet to be finalised.

The next stage will be for the state government of Kedah to decide, the spokesperson said.

The Kedah airport project in Malaysia will consist of developing Kulim International Airport and the Sidam logistics, aerospace and manufacturing hub.

The Kulim airport project, including relevant commercial and residential areas, will be led by private funding, while the Sidam hub project will be led by the government, including its external transport connection to the airport, according to the Kedah Aerotropolis development project website. 

Infrastructure is a major part of CIC’s overseas alternative investment. In particular, it has scaled up exposure to Asia Pacific, as well as to the digital infrastructure, power, renewable energy, and public utilities sectors.

As of the end of 2021, CIC’s assets under management were $1.35 trillion, according to CIC’s latest annual report published in November 2022.

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