West Suffolk Council has said there is "nothing to suggest" a £5m loan it has made to an Essex council will not be returned.
The council has a loan with Thurrock Council, in Essex, which could face losing up to £200m after it invested in companies owned by businessman Liam Kavanagh.
The Bureau of Investigative Journalism found the Essex council could lose multimillions of taxpayers’ money after investing £655m in solar firms owned by Mr Kavanagh.
A spokesperson for West Suffolk Council said: “We are aware of the reports about Thurrock and have contacted them.
“From our conversations and public reports, there is nothing to suggest that this cash investment will not be returned to West Suffolk when it becomes due in December 2022.
“We, like many other councils, offer inter-council treasury management loans to assist other local authorities with their cash flow management.
“This is in line with the agreed treasury management strategy and code of practice agreed by council each year.
“Lending to local authorities is considered low risk and brings an income into the authority to support essential services.”
Conservative-run Thurrock Council borrowed from more than 100 local authorities to fund investments in Kavanagh’s companies, which used the money to buy dozens of solar farms.
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