CM: Penang seeks federal backing for proposed international financial centre in Budget 2027

GEORGE TOWN, Aug 19 — Penang is hoping for its proposed international financial centre (PIFC) to be approved under Budget 2027.

Chief minister Chow Kon Yeow said the state hopes to pitch the proposed PIFC to the Finance Ministry with the white paper prepared by an appointed consultant.

“The purpose of the PIFC is not to compete with Kuala Lumpur, Labuan or Johor SEZ, but we need to differentiate the financial centre in Penang based on our strong foundation as a technology hub in the world and the region,” he told reporters after the closing ceremony of the “Powering SemiCons: Financing Your Next Breakthrough” event here.

He said the PIFC could eventually be known as the Penang Technology Financial Centre, to better reflect its intended purpose of financing technology development in the state.

“Basically, the same issue that we are talking about is how to finance our technology development and to unleash the potential here with the financing that comes with the PIFC,” he said.

Chow said Penang had spent decades laying the groundwork for its industrial ecosystem, including through multinational companies, infrastructure, industrial parks, experienced firms and talent.

However, he said financing remained a key missing piece, particularly for local small and medium enterprises seeking to grow beyond their existing capabilities.

“Our local companies need to be more confident and daring in accessing capital,” he said, citing equity financing, institutional investment and, where suitable, initial public offerings as possible avenues.

“Going public should not only be seen as an exit for founders; it can provide the capital needed to scale, attract talent and compete internationally,” he said.

He said stronger links between SMEs, multinational corporations, technology, talent and capital would create a more resilient semiconductor ecosystem in Penang.

Chow also said the state’s growing focus on integrated circuit design over the past two years had produced encouraging results, as Penang seeks to move beyond its traditional strength in assembly, testing and related activities.

He expressed hope that the federal government could provide a firm commitment on the proposed financial centre in the 2027 Budget.

“If there is an announcement that the federal government is okay with this PIFC initiative, we will be very happy,” he said.

He added that once the state gets the green light from Putrajaya, they can move to the second phase of the PIFC.

He said this would include appointing further consultants and defining the respective roles of the federal and state governments.

Chow said it was too early to discuss interest from international banks, as such engagement would form part of the second phase after an in-principle approval was secured.

He said the proposal was timely given the semiconductor industry’s growth, geopolitical developments and the artificial intelligence boom, which have increased companies’ need for funding to scale up.

“Malaysia can have a financial centre based on technology and the technology industry that perhaps does not yet exist elsewhere in the region,” he said.