Sabah’s Robust Economic Development

Over the past five years, the State Government has created a strong and united Sabah and built better lives for its people. The GRS-led government has brought robust economic development on solid foundations. “Our riches are manifold – from minerals such as gold, copper, silica, palm oil, cocoa and multiple energy resources such as crude petroleum, gas, hydroelectricity, coal and more,” Chief Minister Datuk Seri Panglima Haji Hajiji Haji Noor, said on 19 July 2025, at the International Business Review (IBR) ASEAN Awards at the Sabah International Convention Centre (SICC), Kota Kinabalu. “Our oceans benevolently give us the abundance of some of the most sought-after seafood delicacies and thermal energy while maintaining pristine and untouched coral reefs.”

Hajiji said that Sabah had sealed the Commercial Collaboration Agreement (CCA) with PETRONAS in December 2021 giving Sabah more participation and decision-making in the oil and gas industry in Sabah, and since then the trajectory path in the O&G and energy sector has been phenomenal. “We own 50 per cent equity at the Samarang oil and gas fiel; 25 per cent equity in the SAMUR petrochemical complex; 25 per cent equity in the USD3.1 billion floating liquefied natural gas (ZLNG), Sipitang; 10 per cent equity in LNG9; 100% ownership in Sabah International Petroleum (SIP), which operates both the FPSO and FSO assets; exploration rights in blocks SB409 (20%), SB403 (20%), SB306A (15%) and SB306B (15%). Sabah will acquire a 40 per cent participating interest in PFLNG1 by 2025, Hajiji said.

“Sabah recorded RM17.41 billion from 73 companies in foreign and domestic investments in the manufacturing sector since September 2020. “A majority of these companies, have set up businesses in the state with a total investment of RM7.8 billion, creating 3,636 job.” Between 2022 and 2024, Sabah has received new investment proposals worth an additional RM42.3 billion, and a potential 33,000 job opportunities, Hajiji said. The RM31 billion steel production plant in Sipitang managed by Esteel Enterprise Sabah Sdn Bhd will create a ripple effect extending beyond green technology to spur innovation, drive benefits for businesses and communities in Sabah, Hajiji added.

The State Government has approved the construction of three new industrial parks in Kota Belud, Beaufort and Kudat for the Blue Economy Industrial Park - all strategically located to grow investment opportunities. The Blue Economy is set to propel immense investment opportunities for Kudat and for Sabah. “This sector will yield 491,000 metric tons of marine and sea food products annually, with a value of RM3.25 billion”, Hajiji said. “Fourteen components of the Blue Economy can be explored, including renewable ocean energy, blue carbon, tourism, maritime transport, and marine biotechnology.” For the ocean energy sector, the Ocean Thermal Energy Conversion (OTEC) will be massive and Sabah has begun planning for OTEC power plants spanning 500km of coastline assets to generate 20,000MW of green energy, a gamechanger for the country and for the region, Hajiji added.

On accessibility convenience, Hajiji said that Sabah welcomes more direct connectivity to enable easy access for investors, tourists and businesses. AirAsia’s new Kota Kinabalu-Taipei-Fukuoka route is one example that has benefitted the tourism and investment sectors. On the power supply issue, the State Government has launched the Sabah Energy Roadmap and Master Plan 2040, which will generate 700MW of power supply within two years. For water shortages, the state government has allocated RM680 million in 2024 to address the issues which include the completion of the Ulu Padas hydropower project, which has a daily release capacity of 6,000 million litres of water. On human capital development, the state government has spent RM1 billion on education and youth development programmes.