KUCHING – The Federal Government has increased Sarawak’s interim special grant to RM1.5 billion from RM600 million, Prime Minister Datuk Seri Anwar Ibrahim announced during the national-level Malaysia Day 2026 celebration in Kuching on Wednesday.
Anwar said the higher allocation would take effect this year, while negotiations with the Sarawak and Sabah governments would continue towards establishing a sustainable formula for determining the annual special grant.
He made the announcement while addressing the Malaysia Day celebration at the Borneo Convention Centre Kuching (BCCK), where the Governor of Sarawak, Tun Dr Wan Junaidi Tuanku Jaafar, was the guest of honour.
Sarawak Premier Tan Sri Abang Johari Tun Openg and Sabah Chief Minister Datuk Seri Hajiji Noor were also among those attending the event.
Anwar said the decision followed the earlier announcement of an increase in Sabah’s interim special grant from RM600 million to RM1.5 billion.
He described the corresponding allocation for Sarawak as being made in the spirit of solidarity and continued cooperation between the federal and state governments.
The Prime Minister said discussions would remain ongoing on a longer-term mechanism for determining the annual payments, indicating that the RM1.5 billion allocation is an interim arrangement while negotiations continue.
The special grant is among the financial matters discussed between the Federal Government and the governments of Sabah and Sarawak in the broader context of federal-state relations.
In his address, Anwar also said disagreements within the Malaysian federation could be addressed through continued dialogue and cooperation between the parties involved.
He said the federal and state governments had been able to implement projects and programmes for the public through cooperation between the different levels of government.
The Prime Minister also touched on cooperation between national oil company Petroliam Nasional Bhd (PETRONAS) and Sarawak’s state-owned oil and gas company, Petroleum Sarawak Bhd (PETROS).
Anwar said he wanted the two companies to work together in developing the country’s oil and gas sector.
He said reaching an agreement would require both sides to recognise and respect the relevant federal and state laws.
According to Anwar, the government had decided that the commercial agreement between PETRONAS and PETROS should be expedited and brought to a conclusion.
He said there was no reason for the matter not to be resolved, while stressing the importance of cooperation between the two entities.
The remarks came as Kuching hosted the national-level Malaysia Day celebration on 16 September, with federal and state leaders gathered at the BCCK for the annual national observance.
The announcements on the special grant and the proposed progress on the PETRONAS-PETROS commercial agreement add to ongoing discussions between Putrajaya and Sarawak over financial arrangements, administrative powers and the management of resources within the federation.
The Federal Government and Sarawak have continued negotiations on matters relating to their respective responsibilities and rights, with Malaysia Agreement 1963-related issues forming part of the wider federal-state discussions.
