KUALA LUMPUR (Oct 14): The federal government has forked out a total of RM39.74 billion in guarantee commitment grants to repay 1Malaysia Development Bhd (1MDB) debts from 2019 to 2023.
The grants channelled over the five-year period to 1MDB were utilised for RM29.62 billion in principal repayments and RM10.11 billion in other expenses, including bond interest and coupon payments, according to the Auditor General’s Report released on Monday.
“The federal government distributed the guarantee commitment grants to 1MDB using various sources, for the purpose of repaying debts, consisting of development allocations, [1MDB] Assets Recovery Trust Account, Dana Mudahcara and Hope Fund,” it added.
RM34.59 billion of the government grant-funded 1MDB debt repayment was done in 2022 and 2023.
Of this, RM20.06 billion (58%) was funded by the 1MDB Assets Recovery Trust Account while the other RM14.53 billion (42%) was sourced from the federal government’s development allocation.
The US$1.75 billion 1MDB Energy (Langat) Ltd (1MELL) and US$1.75 billion 1MDB Energy Ltd (1MEL) bonds matured in 2022, while the US$3 billion 1MDB Global Investment Ltd (1MDB GIL) bond matured in 2023.
1MDB, established in 2009 as Terengganu Investment Authority, was set up as a fund to drive new investments in Malaysia. The fund raised billions of dollars in debt to acquire strategic assets like power plants, but also lost billions due to misappropriation of funds in the process.
Another RM9.46 billion outstanding
Going forward, the federal government will need to allocate another RM9.46 billion to repay the remaining 1MDB debt balance. This comprises RM5 billion principal and RM4.46 billion in coupon payments on Sukuk Islamic Medium Term Notes (IMTN) that will mature on May 27, 2039.
The report recommended the federal government recover assets related to 1MDB and SRC International Sdn Bhd from domestic and foreign parties, and use funds from the recovered assets to cover the debt repayment expenses.
This recommendation was made given that the 1MDB Assets Recovery Trust Account is slated to be closed no later than 2028, as stipulated in its trust directive.
For more AG's Report 2024 stories, click here.