The Finance Ministry (MoF) has yet to receive any formal application from the Penang state government over its intention to apply for a loan from the Export-Import Bank of China (EXIM) to finance the RM27 billion Penang Transport Master Plan (PTMP) project.

Second Finance Minister, Datuk Seri Johari Abdul Ghani said the federal government had no issue with the application, so long as the entity applying for the loan, is able to repay it.

"But we need to go through the right procedures, not only at the MoF level, but also adhere to Bank Negara's procedures and all other processes as well.

"This is to ensure that the borrower is able to sustain or repay from the proceeds of the business being undertaken in Malaysia," he told reporters after officiating the National Public Sector Accountant Conference 2017 here today.

He said the borrower also needs to justify the application for overseas funding, while there is ample liquidity domestically.

It was reported earlier in May that the Penang Legislative Assembly had passed a bill allowing the state government to borrow from banks or financial institutions.

Chief Minister Lim Guan Eng had said the loan would be primarily used to fund investments and implementation of the physical development, economic and social programmes for the state, including the PTMP and other related projects.

-- BERNAMA