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KUALA LUMPUR (March 17): Malaysia has appointed eight local and foreign banks to manage East Coast Rail Link’s renminbi loan exposure as the project nears completion.
Malaysia Rail Link Sdn Bhd, owner of the project also known as ECRL, signed an agreement with the banks, including CIMB Group Holdings Bhd (KL:CIMB) and United Overseas Bank, to set up risk management mechanism to manage repayments for the project’s renminbi-denominated financing.
Under the arrangement, the banks have been appointed as joint lead coordinators to oversee the currency risk management framework linked to the ECRL’s loan obligations, according to a statement.
“This mechanism is expected to improve exchange-rate certainty and reduce exposure to volatility in the foreign-exchange market, while ensuring the project’s financial management is carried out efficiently and in line with international financial market best practices,” the statement read.
Other participating banks include Malayan Banking Bhd (KL:MAYBANK), RHB Bank Bhd (KL:RHBBANK), AMMB Holdings Bhd (KL:AMBANK), alongside international lenders Bank of China, China Construction Bank, and Industrial and Commercial Bank of China.
The banks will coordinate the implementation of hedging and foreign-exchange management strategies to mitigate currency fluctuations affecting the loan servicing.
Spanning 665km and comprising 20 stations, the ECRL is one of Malaysia’s largest infrastructure projects costing over RM50 billion and forms part of broader regional connectivity initiatives linked to China’s Belt and Road framework.
The railway is implemented through a government-to-government partnership between Malaysia and China, with financing provided via a loan from the Export-Import Bank of China.
Malaysia Rail Link, a wholly owned subsidiary of the Minister of Finance Inc, secured a RM37.4 billion term loan from the Export-Import Bank of China at an interest rate of 3.25% to fund the development.
The ECRL, designed to link Malaysia’s east coast states with the Klang Valley economic hub, is now entering its testing and commissioning phase following the completion of major construction works.
As of February 2026, the project has reached around 93% completion, with track laying completed along the 519km alignment between Kota Bharu in Kelantan and Gombak in Selangor.
The rail line is scheduled for full completion by the end of 2026, with passenger and cargo services between Kota Bharu and Gombak expected to begin in January 2027. The second section connecting Gombak to Port Klang, Malaysia’s largest maritime gateway, is slated for completion in 2028.
The engineering, procurement, construction and commissioning works for the project are being carried out by China Communications Construction (ECRL) Sdn Bhd.
Read also:
Malaysia’s ECRL enters testing phase as 519km Kota Bharu-Gombak track completed
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