Sabah’s Economic Growth Built on Solid Foundations, Says Chief Minister

20 July 2025

KOTA KINABALU: Sabah’s economic development is now firmly anchored on solid foundations, thanks to a clear vision and strategic roadmaps laid out by the current State Government, said Chief Minister Datuk Seri Panglima Hajiji Noor.

Speaking at the International Business Review (IBR) ASEAN Awards held at the Sabah International Convention Centre (SICC) last night, via a speech delivered by Finance Minister Datuk Seri Panglima Masidi Manjun, Hajiji said the government has spent the last five years building a stronger, more united Sabah, one that is open to the world and ready to leverage its abundant natural resources to improve the lives of its people.

“Our wealth is vast, from mineral resources such as gold, copper, silica, palm oil and cocoa, to multiple energy sources including crude petroleum, natural gas, hydroelectricity, and coal. Our oceans bless us with world-class seafood, thermal energy, and pristine coral reefs that remain largely untouched,” he said.

Hajiji highlighted Sabah’s landmark Commercial Collaborative Agreement with Petronas, which has enabled greater state participation in the oil and gas industry.

“We now hold 50 per cent equity in the Samarang oil and gas field and 25 per cent equity in Samur. Most recently, on 17 July 2025, we signed an agreement with Petronas to acquire a 25 per cent stake in the USD3.1 billion floating liquefied natural gas (ZLNG) project, known as PFLNG 3, based in Sipitang,” he said.

On the investment front, Hajiji reported that Sabah has attracted RM17.41 billion in approved domestic and foreign investments in the manufacturing sector since September 2020. Of the 73 approved companies, 52 have already commenced operations in the state, contributing RM7.8 billion in investment and creating 3,636 job opportunities.

Between 2022 and 2024, Sabah received new investment proposals worth RM42.3 billion, projected to create an additional 32,996 jobs.

A major contributor is the three-phase, RM31 billion Esteel Enterprise Sabah Sdn Bhd project launched at the end of June this year.

Hajiji said this initiative will generate ripple effects beyond green technology by fostering innovation and bringing long-term benefits to businesses and local communities.

To meet growing investor demand, the State Government has approved the development of three new industrial parks, one each in Kota Belud and Beaufort, and a Blue Economy Industrial Park in Kudat.

“We are confident these developments position Sabah well as we continue exploring new frontiers to realise our full potential,” he said. “Sabah remains firmly investor-friendly. We have adopted policies that welcome investment, and we are committed to creating a conducive environment that supports collaboration and long-term growth.”

Hajiji also called for improved air connectivity to support tourism and investment, highlighting AirAsia’s new Kota Kinabalu–Taipei–Fukuoka route as a positive step forward.

He identified the Blue Economy as a transformative sector for Sabah. The Kudat-based initiative is expected to generate 491,000 metric tonnes of marine harvests annually, mainly fish and prawns, valued at RM3.25 billion.

“But the Blue Economy is about much more than just fisheries,” he said.

“There are 14 components we aim to develop, including ocean-based renewable energy, blue carbon, maritime transport, marine biotechnology, and tourism.”

Among the most promising ventures, Hajiji said, is Ocean Thermal Energy Conversion (OTEC), which uses ocean temperature gradients to generate electricity. OTEC plants are being planned along 500km of Sabah’s coastline, with the potential to generate up to 20,000MW of green energy, one of the largest such projects in the world.

“This isn’t just a game changer for Sabah or Malaysia it could transform the entire region,” he said.

On energy infrastructure, the Chief Minister announced that under the Sabah Energy Roadmap and Master Plan 2040, the state aims to generate an additional 700MW of electricity within the next one to two years to support industrial and domestic needs.

To tackle water shortages, the State Government has allocated RM679.85 million in 2024 for immediate solutions, alongside long-term investments such as the Ulu Padas Hydropower Project, which will provide 6,000 million litres of water per day.

Hajiji also underscored the State Government’s commitment to human capital development. From 2021 to 2024, nearly RM1 billion was invested in education and youth development programmes.

“We are building not just infrastructure, but the future generation of Sabahans who will lead the state to greater heights,” he said.