US$150 million Exim Bank loan follows agreement, says 1MDB

1MDB president says the investor's loan with Exim Bank follows all rules of the agreement. – The Malaysian Insider filepic, June 18, 2015.

1Malaysia Development Bhd (1MDB) today confirmed it took a US$150 million (RM561 million) loan from the Export Bank of Malaysia (Exim Bank), adding that the loan proceeds were utilised per the terms of the agreement amid claims that the bank is not meant to lend money for domestic property purchases.

"It is a well-known fact that the 1MDB Group includes Edra Energy, a leading international independent power producer, with a portfolio of 13 power and desalination plants in five countries," said 1MDB president and group executive director Arul Kanda Kandasamy.

"1MDB confirms that loan proceeds were utilised per the terms of the agreement, which is to 'finance the general corporate purposes including but not limited to the working capital requirements, future capital expenditures and equity infusion of the energy business within the 1MDB Group of Companies'."

However, Arul Kanda did not elaborate on how the funds were spent.

DAP MP and Parliament's Public Accounts Committee member Tony Pua had accused the government of abusing its power for providing a letter of support to Exim Bank to issue the loan to 1MDB.

He said the money was used to purchase land in Pulau Indah, even though the bank was not mandated to provide loans for domestic property purchases.

But Deputy Finance Minister Datuk Ahmad Maslan denied this yesterday, and said the loan was solely for maintaining and upgrading the company's energy assets abroad.