1Malaysia Development Bhd, the state investment company known as 1MDB, plans to raise as much as $2 billion in an initial public offering of its power assets, said a person with knowledge of the matter.

The IPO may take place in next year's first quarter, said the person, who asked not to be identified as the process is private. 1MDB spent about RM10.8 billion (US$3.5 billion) purchasing the electricity generation plants.

1MDB joins Malaysian companies including Malakoff Bhd in planning IPOs after sales by Felda Global Ventures Holdings Bhd and IHH Healthcare Bhd rewarded investors with stock-market gains.

Malaysia, whose economy unexpectedly accelerated in the most recent quarter, accounts for two of the world's three largest IPOs this year, data compiled by Bloomberg show.

Malakoff, Malaysia's largest independent power producer, is planning an IPO that may raise about US$1 billion, people with knowledge of the matter said in June. Palm-oil producer Felda Global and IHH Healthcare, Asia's largest hospital operator, have both advanced 11 per cent from their offer prices.

1MDB agreed in March to buy billionaire T. Ananda Krishnan's power assets for RM8.5 billion. This week, 1MDB agreed to purchase Genting Bhd's domestic power generation business for RM2.3 billion. Goldman Sachs Group Inc, which advised 1MDB on both deals, is also likely to be hired for the IPO, the person said.

Proceeds from the IPO will be used to repay debt, the person said. 1MDB Chief Executive Officer Shahrol Halmi didn't immediately respond to a phone call seeking comment. -- Bloomberg