[RAM] RAM Ratings affirms AAA(s) ratings on SPV-Sukuk issuances by Sarawak state

RAM Ratings has affirmed the AAA(s)/Stable ratings on Infracap Resources Sdn Bhd’s RM15 billion Sukuk Murabahah Programme (2021/2041) and Aquasar Capital Sdn Bhd’s RM1.5 billion Sukuk Murabahah Programme (2014/2029). Both Infracap Resources and Aquasar Capital serve as funding conduits for the state of Sarawak’s infrastructure and strategic investments initiatives. While the sukuk are not explicitly guaranteed by the state, the ratings reflect Sarawak’s robust credit fundamentals and the state’s demonstrated commitment to supporting principal and profit payments through consistent budgetary allocations.

The ratings are underpinned by our expectations that Sarawak will continue to maintain strong reserves and fiscal performance, supported by prudent fiscal performance and a track record of fiscal surpluses. Sarawak’s economic importance and its solid federal–state relationship provide additional credit strength. While debt is projected to rise in line with ongoing development and investment plans, this is expected to be offset by anticipated revenue growth and the State’s record of prudent financial management.

Sarawak’s adjusted-debt-to-GDP is estimated to remain low at 5.4% as at end-2025 (end-2024: 5.9%), with a total adjusted debt of RM8.4 bil. That said, Sarawak continues to maintain substantial financial reserves. As at end-2024, reserves declined to RM20.7 bil (end 2023: RM26.9 bil), following an RM8 bil appropriation to the Sarawak Sovereign Wealth Future Fund, but remain a strong buffer, providing significant financial resilience.

For 2024, Sarawak achieved a record-high revenue of RM14.2 bil (+6.6% y-o-y), ranking among Malaysia’s top five economic-performing states and the fourth highest in exports nationally. Fiscal surplus stood at RM1.5 bil, supported by higher oil and gas sales tax collections. In 2025, revenue came in at RM12.5 bil, while ordinary expenditure totalled RM14.1 bil, resulting in a deficit of RM1.6 bil, mainly due to weaker crude oil prices. Even so, we expect reserves to remain strong.

Sarawak’s economy grew 3.9% in 2024 (2023: 1.3%), below the targeted 5%–6% due to weaker external demand. Growth was primarily led by the services sector and a recovery in mining and quarrying, while exports increased to RM134.9 bil supported by higher sales of liquefied natural gas and crude palm oil. For 2025, GDP growth is projected at 4.5%–5.0%, underpinned by services sector, ongoing infrastructure projects and gas-related investments.

The 2026 budget is expansionary, designed to stimulate economic growth and support people-centric development, with RM9.3 bil allocated for development expenditure. Nearly 70% of the budget is directed toward infrastructure investments – supporting the state’s ambition to become a regional renewable energy powerhouse – and initiatives for welfare improvement.


Analytical contact
Darrel Tiang
(603) 2780 8219
darrel@ram.com.my

Thong Mun Wai
(603) 2780 8255
munwai@ram.com.my

Media contact
Sakinah Arifin
(603) 2708 8212
sakinah@ram.com.my