Sovereign wealth fund 1Malaysia Development Bhd (1MDB) has won a major government tender to build a power plant, which will help make an up to RM6.6 billion IPO of its power assets more attractive to investors.

The news came just after sources said that 1MDB, chaired by Prime Minister Najib Abdul Razak, had shortlisted at least six investment banks to make final presentations for the IPO.

A decision on the winning bidder for the RM11 billion coal-fired power plant had been delayed after bids from 1MDB and YTL Power International came in too close to call.

State firm Tenaga Nasional and Malakoff Corp Bhd - a unit of MMC Corp had also been in the running.

In its IPO, 1MDB is expected to bundle 15 power plants it bought over a two-year shopping spree in a bid to a capitalise on growing electricity demand in Malaysia, the Middle East and South Asia, financial sources say.

But a Reuters examination of 1MDB's energy assets showed that many of its power plants are either near the end or more than halfway through their concessions.

By contrast, the greenfield power plant is expected to come online in 2018 and run for 25 years, bolstering 1MDB's credentials as a growth stock. 1MDB will build the plant with partner Mitsui & Co Ltd.

Sources familiar with matter said CIMB, Deutsche Bank, Goldman Sachs, Maybank, Morgan Stanley and UBS are among the banks invited for the so-called beauty parade. The banks are expected to make their underwriting pitches in early March.

The list of banks has been whittled down after a dozen banks made proposals in the initial stage of the process in January, they said.

1MDB officials were not immediately available for comment on the IPO process. Representatives for the banks declined to comment.

"After the beauty parade, there will be pressure to get this IPO done before the mid-year ends," a person with direct knowledge of the matter said.

- Reuters