Investments in 1MDB's power plants will not affect EPF, says Deputy Finance Minister

The investments in 1Malaysia Development Bhd's (1MDB) power plants, Jimah Energy Ventures Sdn Bhd (JEV) and Panglima Power Sdn Bhd (PPSB), will not affect the Employees Provident Fund (EPF).

Deputy Finance Minister, Datuk Johari Abdul Ghani, said EPF's investments in the two power plants were in the form of bonds and were made before 1MDB took control of them.

"I don't see the operations by JEV and PPSB can affect EPF's investments. Their operations do not directly depend on 1MDB but on the firms themselves," he said.

Johari said this at the Dewan Rakyat today in reply to Nurul Izzah Anwar (Lembah Pantai-PKR) who wanted to know how the Finance Ministry and government could ensure that EPF would not be affected by its exposure to investments in 1MDB.

"EPF's investments are small. The investment in JEV carries a coupon rate of between 7.7 and 9.85 per cent.

"For PPSB, the coupon rate is between 8.25 and 8.35 per cent. Also, the credit ratings for the two bonds are 'AA3' and 'AA1' respectively," he said.

In May, EPF Chief Executive Officer, Datuk Shahril Ridza Ridzuan, said the RM200 million bonds subscribed by the EPF in 2009 were not risky as they were guaranteed by the government.

He said the exposure was from EPF's involvement in funding the two power plants through straightforward infrastructure bonds in 2003 and 2005 respectively, before 1MDB took over the companies in 2012 and 2014 respectively.