by RAHIMI YUNUS/ pic by BLOOMBERG

THE government has earmarked RM5.1 billion this year and 2020 to pay off debts carried by 1Malaysia Development Bhd (1MDB) and its unit SRC International Sdn Bhd.

Finance Minister Lim Guan Eng said the government has allocated RM2.4 billion in 2019 and RM2.7 billion for next year to service debts incurred by the two firms.

To date, Lim said Finance Ministry (MoF) and MoF Inc has paid off RM8.93 billion of the total RM51 billion of 1MDB’s debts and liabilities (including interests).

“The government is committed to settling the loan obligations inherited from the previous kleptocratic administration,” Lim said in a statement yesterday.

On Oct 18, 2019, Lim said 1MDB made a US$50.3 million (RM210.7 million) interest payment to settle (Langat) Ltd bond.

The bond, valued at US$1.75 billion, was issued on Oct 19, 2012, and will reach maturity on Oct 18, 2022.

Lim said the payment was made by using the 1MDB asset recovery fund, which has collected about RM1.45 billion to date.

There are two upcoming payments to be made this year, which are 1MDB Energy’s bond interest of US$52.4 million which is due on Nov 11 and the Islamic medium-term note sukuk interest amoun-ting to RM143.8 million, due on Nov 29.

On Monday, Bernama reported Prime Minister Tun Dr Mahathir Mohamad as saying that it was a “near miracle” that Malaysia was not bankrupt due to the damage done by the previous regime.

“While 1MDB is without a doubt a monstrosity, we will never be able to fully fathom the damage it caused the nation,” Dr Mahathir said.

Lim said, despite the heavy debt burden, the government is still able to execute the mandate in developing and providing the welfare of the people.