ODA Loan to Malaysia - Assistance to rehabilitate Malaysia's economy
March 5, 1999
- The Government of Japan has decided to extend to the Government of Malaysia an ODA loan of up to 107,695 million yen for its five projects including the Look East Policy Project to positively assist its efforts for social and economic development. Notes to this effect were exchanged on March 3 (Wed.) between Mr. Issei Nomura, Japanese Ambassador to Malaysia, and Mr. Mustapa bin Mohamed, Second Finance Minister of Malaysia.
- The assistance was pledged by Japanese Prime Minister Keizo Obuchi to Malaysian Prime Minister Mahatir Mohamad in December last year, with a view to assisting the Malaysian economy, which had been facing economic difficulties with the impact by the Asian currency crisis.
(a) Look East Policy Project up to 14,026 million yen (b) Beris Dan Construction Project up to 9,737 million yen (c) Post Dickson Power (Tuanku Jaafar) Rehabilitation Project up to 49,087 million yen (d) Construction Project of University of Malaysia Sarawak up to 18,549 million yen (e) Small and Medium Industries Development Fund Program up to 16,296 million yen Total: up to 107,695 million yen
- Characteristics of this ODA loan
(1) The largest ever amount
To aid Malaysia's ailing economy affected by the Asian currency crisis, the amount of this assistance surpasses 62,900 million yen that was extended in FY 1992.
(2) Focused fields of cooperation
The package of this ODA loan is in line with Malaysia's emphasized fields such as human resources development, environmental policies, and assistance to small-and medium-size enterprises.
(3) Application of privilege interest
As a special treatment which was introduced in the Comprehensive Economic Measures in April 1998 for countries with greatly depreciated currencies, an interest for middle-income countries will be applied for Malaysia. For the main part of project (b), general environment interest (1.7%) will be applied; for other projects for environment, human resources development and small-and medium-size enterprises, special interest (0.75%) will be applied.
- Terms and conditions of the loan
(1) Interest rate
Main part of (b): 1.7% per annum (general environmental interest),
(a), (c), (d) and (e): 0.75% per annum (special interest for environment, human resources development, small and medium-size enterprises)
Consulting part of (b): 0.75% (special interest for environment)
(2) Repayment period
General environment interest: 25 years (including a 7-year grace period)
Special interest for environment, human resources development and small-and medium-size enterprises: 40 years (including a 10-year grace period)
(3) Procurement method: general untied
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