KUALA LUMPUR: Singapore-based petrochemicals, green energy and natural resources conglomerate ChemOne Group announced that the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), a wholly owned subsidiary of the Islamic Development Bank (IsDB), has approved an insurance cover of US$350 million (RM1.4 billion) for Pengerang Energy Complex (PEC) in Johor.
This cover is structured to support Islamic banks participating in PEC’s project financing, underscoring the strong institutional confidence in PEC and its long term strategic value to the region.
“ICIEC’s support is a powerful validation of PEC’s financial strength and far-reaching development impact. PEC will drive regional industrial growth, create thousands of jobs, and support regional value chains, all while adhering to global standards for sustainable and responsible financing. We are honoured to lead one of Asia’s most impactful private-sector led financings,” said ChemOne chief financial officer Mayank Vishnoi.
The ICIEC cover is structured under a Murabaha financing facility, providing 90% cover on both principle and profit—significantly de-risking the transaction for participating Islamic banks including National Bank of Kuwait, Qatar National Bank, Al Rajhi Bank Malaysia and Al Rajhi Bank KSA.
Al Rajhi Bank KSA plays the role of lead Islamic bank and a coordinator to ICIEC as well as investment agent for the Islamic financing tranche.
In addition, the IsDB Group—through IsDB and the Islamic Corporation for the Development of the Private Sector (ICD)—has reinforced its commitment through a direct investment of US$150 million via Istisna-Ijara structures. The IsDB Group’s total support for PEC—combining direct investments and credit enhancement—now stands at over US$500 million, marking one of the group’s most substantial engagements in Southeast Asia.
ICIEC is backed by AA- and Aa3 credit ratings from S&P and Moody’s respectively, highlighting its strong financial fundamentals and key multilateral mandate to promote investment within member states.
The PEC is envisioned as one of Southeast Asia’s most advanced and sustainable energy and petrochemical facilities. Upon completion, the project will significantly boost regional supply capabilities in aromatics, clean fuels, and related products, all while adhering to international environmental, social, and governance (ESG) standards.
The strong support from multilateral institutions reflects PEC’s strategic role in supporting energy resilience and sustainability. The project is also aligned with Malaysia’s ambitions to enhance downstream capabilities and increase the value-add in its hydrocarbon sector.
Located in Johor’s Pengerang Integrated Petroleum Complex (PIPC) in Johor, PEC is set to be one of the world’s largest and most competitive integrated condensate splitter and aromatics facilities. It will utilise UOP Honeywell’s latest LD Parex technology to maximise energy efficiency, reduce emissions, and enhance feedstock flexibility, allowing the PEC plant to become one of the most advanced energy and carbon facilities in its class.
During construction, PEC will create approximately 7,000 jobs, with 300 operational roles post completion of which 80% of which will be filled by Malaysians. Local SMEs are expected to benefit from US$1.2 billion in contracts in the areas of fabrication, erection, civil work, and bulk supplies.
With a projected annual export turnover of US$5 billion, PEC is poised to position PIPC as a regional oil and gas hub and propel Malaysia’s position in the regional oil and gas value chain.
