PUTRAJAYA, July 23 – The Ministry of Finance (MOF) has confirmed that the Assignment for Financial Service Reserve Account (FSRA) agreement was signed by Prime Minister Datuk Seri Anwar Ibrahim on June 26. In a statement released on Thursday, MOF stated that the agreement involves a Government Guarantee of RM9.9 billion to the Federal Land Development Authority (Felda) for the restructuring of the agency’s loans through sukuk issuances and refinancing credits to restore Felda’s financial position.
“Under the agreement, the government will finance the repayment of the sukuk through a grant allocation of RM990 million annually for a period of 10 years,” said the ministry. Additionally, MOF confirmed that the first disbursement of RM990 million was executed on July 18, in line with the provisions set in the 2023 Budget. “The completion of the government guarantee agreement and the allocation disbursement to Felda are vital measures undertaken by the Unity Government to ensure the agency’s sustainability.
Taking into account the impact on cash flow and financial position following the elimination of settlers’ debts,” said MOF. The issue of Felda’s debt disposal has been a subject of controversy after Anwar claimed during a Farmers’ Day event that the debt relief for settlers was not carried out by the previous Perikatan Nasional (PN) government, and it continued until he assumed office.
Prior to that, in 2021, the then-Prime Minister Tan Sri Muhyiddin Yassin announced the government’s agreement to partially waive the Felda settlers’ loans amounting to RM8.3 billion, subject to conditions. The agreement considered the need to rectify Felda settlers’ debt issues as a prerequisite for facilitating the agency’s restructuring or revival process.
