By Mark Bendeich
KUALA LUMPUR (Reuters) - Three Islamic banks are teaming up with Malaysian utility Sarawak Energy (SARA.KL: Quote, Profile, Research, Stock Buzz) to set up an Islamic energy fund to finance up to $6 billion in projects in Malaysia's Sarawak state, one of the banks said on Tuesday.
The parties are due to sign a memorandum of understanding in Sarawak, on Borneo island, next week and hope to set up the fund with an initial size of about $1 billion this year, Asian Finance Bank Chief Executive Faisal Alshowaikh said.
"We will start with a $1 billion fund and then move towards the rest of the $6 billion as we go along," he told the Reuters Islamic Finance summit.
The other two banks involved in setting up the fund are RHB Islamic, a unit of Malaysian bank RHB Capital Bhd (RHBC.KL: Quote, Profile, Research, Stock Buzz), and Bahrain-based Unicorn Investment Bank, Alshowaikh said.
Sarawak Energy could not be immediately reached for comment.
Sarawak state is building one of the largest hydro-electricity complexes outside China. Its 2,400 megawatt Bakun dam is nearing completion and the state plans to develop another 2,000 megawatts in hydro-electric capacity by 2013.
Asian Finance Bank, controlled by Qatar Islamic Bank QISB.QA, and Unicorn Investment Bank are looking to channel Middle East money into Asian investments that comply with Islamic or sharia law, which bans investment in activities such as gambling, alcohol, tobacco, pork and weapons manufacturing.
NEW ISLAMIC MARINE FUND Continued...
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