Malaysia

Sabah owes RM6 billion in federal loans, as water and sewerage issues persist

Of that amount, RM3.1 billion has already matured and is being repaid, while the rest will only become due once the current deferred repayment period ends.

Updated 1 year ago · Published on 23 Apr 2025 4:46PM

Sabah owes RM6 billion in federal loans, as water and sewerage issues persist
Annual repayments are capped at RM500 million over 20 years. - April 23, 2025

by Jason Santos

SABAH has confirmed it owes RM6 billion to the federal government—funds largely channelled into long-overdue infrastructure projects in the state’s water and sewerage sectors.

Of that amount, RM3.1 billion has already matured and is being repaid, while the rest will only become due once the current deferred repayment period ends.

Annual repayments are capped at RM500 million over 20 years.

“The state government wishes to clarify that the remaining RM3.1 billion from the overall RM6 billion (debt) will only mature after the deferred repayment period ends, with annual repayments capped at no more than RM500 million for a period of 20 years.

“These interest-free federal loans are considered beneficial to the state government, as they have enabled the state to implement various critical projects without affecting the state’s financial stability,” the Sabah Finance Ministry said in a written reply to the state assembly last week.

The issue was raised by Warisan’s Tungku assemblyman Assafal P. Alian, who sought clarity on the state’s financial commitments to Putrajaya.

He confirmed to have received the ministry’s written response on April 21.

Sabah has struggled with inadequate basic utilities despite its abundant natural resources.

Vast areas—especially rural and fast-growing urban zones—still experience erratic water supply, while much of the sewerage infrastructure remains outdated or absent altogether.

Decades of underinvestment have left the state grappling with an infrastructure backlog, worsened by rapid urbanisation and growing demands from tourism.

In many places, broken pipes, water rationing, and open drains are part of everyday life.

Federal loans have become a critical instrument for the Sabah government to fund projects its own budget cannot sustain.  – April 23, 2025

Related News

Malaysia / 11h

Sabah does not agree to 200-litre diesel quota, forms special committee - Masidi

Malaysia / 5d

BNPL users hit eight million as outstanding balances reach RM5.3b

Malaysia / 1w

Banks need to do more to help counter rising costs of living – Guan Eng

Malaysia / 3w

Malaysia’s hidden debt trap: When borrowing becomes a way of life

Malaysia / 1mth

Tsunami alert: Stay calm and obey instructions from the authorities – Hajiji (video)

Business / 1mth

Time for banks to step up and do their part, stresses former finance minister

Spotlight

Malaysia

After Johor, the uncomfortable question for Anwar’s critics: Were we too impatient?

By The Vibes Says

Malaysia

Network School's business licences revoked, to cease operations tomorrow

Opinion

Orang Asli in Pahang: Token gestures or genuine recognition?

Malaysia

Tuition teacher sentenced to 105 years in prison and 70 lashes for raping daughter

Malaysia

Azam Baki denies involvement in RM178.29 million contract linked to brother’s company

Malaysia

Aminuddin urges NS voters to weigh manifesto promising benefits for M40 and B40 groups

Malaysia

No need to resign, PM has absolute power if there is doubt – Ahmad Zahid

World

Gaza’s water crisis deepens as families face thirst, disease and collapsing sanitation systems

You may be interested

Malaysia

PH banks on Negeri Sembilan development record as campaign heats up

Malaysia

Immigration tracks 19 Network School foreign nationals who 'vanished' from official records

Malaysia

Network School's business licences revoked, to cease operations tomorrow

Malaysia

Sabah does not agree to 200-litre diesel quota, forms special committee - Masidi

Malaysia

Activist charged over alleged desecration of Hindu sacred object at Langkawi temple site

Malaysia

No need to resign, PM has absolute power if there is doubt – Ahmad Zahid

Malaysia

Sabah seeks additional RM1.61b allocation to fund state operations and development needs

Malaysia

After Johor, the uncomfortable question for Anwar’s critics: Were we too impatient?

By The Vibes Says