The start of the project dates back to 1996, when contact was first made between the Spanish Machine Tool Manufacturing Association (AFM) and the representatives of MARA (1).

These relations culminated on 11 November 1999, with the signing of a Letter of Understanding (LOU) and the Definitive Agreement between MARA and CONTES S.A. (2), the two entities directly responsible for implementing the project.

The project was funded by the Spanish Government through the Development Assistance Fund (DAF). The funding was approved in December 2000 by the Council of Ministers and consisted of:

- A donation of 2,655,000 US dollars for Technical Assistance.

- A DAF loan to the amount of 5,900,000 US dollars for purchasing machine tools.

On 20 August 2002, the University of Kuala Lumpur was set up. This institution, backed by MARA, aims to provide Technical Training. The MSI became part of the University of Kuala Lumpur in August 2003, along with the MFI (Malaysian French Institute) and the BMI (British Malaysian Institute).

(1) MARA, Majlis Amanah Rakyat, is a public organisation dependent on the Ministry of Entrepeneur and Cooperative Development, which was set up in 1966 with the aim of promoting, motivating and facilitating the implementation of activities designed to aid the social and economic development of the Bumiputra ethic group.

(2) CONTES, S.A. is a commercial firm backed by the AFM whose main partner is the Machine Tool Institute (IMH) in Elgoibar and whose main aim is to promote the MSI.

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