Prime Minister Anwar Ibrahim has announced record-high allocations for Sabah and Sarawak under Budget 2026, with development funds increased to RM6.9 billion for Sabah and RM6 billion for Sarawak.
He also revealed that the special grants for both states will be doubled to RM600 million, up from RM300 million in 2023 — reflecting the government’s strong commitment to accelerating growth in East Malaysia.
“The government remains firmly committed to driving development in Sabah and Sarawak — not just through words, but through real action to close the infrastructure and economic gap,” Anwar said.
Despite the full handover of electricity regulation to Sabah last year, Putrajaya will still allocate RM1.2 billion to ensure stable and reliable power supply. Following the Penampang landslide, which disrupted electricity for 230,000 users, the government has also approved the RM765 million Southern Link Transmission Project to strengthen grid reliability.
Additionally, RM1 billion has been set aside to upgrade water infrastructure in Sabah, including the installation of new pipes in Tawau and replacement of ageing ones in Kota Kinabalu, Penampang, and Putatan, with completion expected next year.
