ChemOne Group, a Singapore-based petrochemicals, green energy and natural resources conglomerate, has secured US$350 million in Islamic insurance cover for the Pengerang Energy Complex ( PEC ) in Johor, Malaysia.

The Islamic Corporation for the Insurance of Investment and Export Credit ( ICIEC ), a wholly owned subsidiary of the Islamic Development Bank ( IsDB ), has approved the cover, which supports Islamic banks participating in the PEC’s project financing.

“ICIEC’s support is a powerful validation of PEC’s financial strength and far-reaching development impact,” says ChemOne Group chief financial officer Mayank Vishnoi.

“The PEC will drive regional industrial growth, create thousands of jobs, and support regional value chains, while adhering to global standards for sustainable and responsible financing.”

ESG standards

The US$5.3 billion complex is envisioned as one of Southeast Asia’s most advanced and sustainable energy and petrochemical facilities.

The integrated condensate splitter and aromatics facility is located within the Pengerang Integrated Petroleum Complex ( PIPC ). Strategically positioned near major Asian markets and global feedstock suppliers, the PEC is designed to produce 2.6 million tonnes of aromatics, 3.0 million tonnes of energy products, and 50,000 tonnes of hydrogen annually.

The facility will process 150,000 barrels per day of condensate and additional naphtha feed, supporting downstream renewable fuel developments in Johor.

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.

It will utilize UOP Honeywell’s latest LD Parex technology to maximize energy efficiency, reduce emissions, and enhance feedstock flexibility, allowing the plant to become one of the most advanced energy and carbon facilities in its class.

Economic benefits

During construction, PEC will create approximately 7,000 jobs, with 300 operational roles post-completion, of which 80% will be filled by Malaysians. Local small and medium-scale enterprises 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, the PEC is poised to position PIPC as a regional oil and gas hub and strengthen Malaysia’s role in the regional oil and gas value chain.

The strong support from multilateral institutions reflects the PEC’s strategic role in supporting energy resilience and sustainability, ChemOne says. The project is also aligned with Malaysia’s ambitions to enhance downstream capabilities and increase the value-add in its hydrocarbon sector.

De-risking role

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. These banks include  National Bank of Kuwait ( NBK ), Qatar National Bank ( QNB ), 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.

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 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, ChemOne says.