Kota Kinabalu: Singapore’s OCBC Group mezzanine capital unit which is South-east Asia’s second-largest lender, has invested in Sabah’s US$1.5 billion plant hot briquetted iron plant, being developed by Green Esteel, a Singapore-based investment holding company focused on low-carbon steel.
The RM6.4 billion Phase One project plant is part of the RM31 billion three-phase project by Esteel Enterprise Sabah Sdn Bhd at the Sipitang Oil and Gas Industrial Park (SOGIP) is scheduled for commissioning by 2030 to be part of South-east Asia’s largest integrated low-carbon steel plant.
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This is the first commercial funding Green Esteel has received from an Asian financial institution.
This project was launched by Prime Minister Datuk Seri Anwar Ibrahim last May 2025 with Chief Minister Datuk Seri Hajiji Noor stressing that the project will create jobs and improve the livelihoods of people in Sipitang and the entire state.
Managing Director of Esteel Enterprise Sabah Sdn. Bhd, Nick Xu Yihang, delivered a comprehensive update on the project’s current developments, key milestones, and future outlook as the State Government is focused and committed to ensure that high-impact projects such as Esteel are implemented smoothly and remain on track as scheduled in its drive on strategic investments and to strengthen the growth of Sabah’s heavy industries.
The capital injection from OCBC’s investment arm is part of the bank’s sustainability investment programme, which seeks to directly invest in green and transition assets in line with sustainability priority of its ESG and SDGs support.
The iron plant aims to produce a low-carbon iron product, which is one of the key materials in manufacturing steel with a targeted annual production capacity of 2.5 million tonnes of low-carbon iron, which can be used to produce approximately the same volume of low-carbon steel.
The capital injection from OCBC’s investment arm is part of the bank’s sustainability investment programme, which seeks to directly invest in green and transition assets and high-growth companies with sustainable innovations.
The bank said that its investment in Green Esteel is timely as traditional steel production relies heavily on coal, which accounts for approximately 7 per cent of global greenhouse gas emissions.
“As the global economy accelerates its low-carbon transition, demand for low-carbon steel is expected to grow rapidly. Compared to traditional steel production, low-carbon steel production technologies can potentially produce up to 80 per cent lesser carbon emissions.”
Market reports on the green steel industry indicated that the low-carbon steel market is projected to have a compound annual growth rate of 21.4 per cent from 2024 to reach a size of US$19.4 billion by 2029.
OCBC’s investment is also part of its efforts to drive decarbonisation of the steel sector, which is one of six sectors for which the bank has set net-zero targets and this represents a significant milestone for Sabah as the state seeks to explore new horizons and realise its full potential.
Besides SOGIP, the Kota Kinabalu Industrial Park has seen increased tenancy over the past four years as the Sapangar Bay Container Port (SBCP) increases its operations to serve more exporters.
Due to high investor demand, Hajiji said the state government has approved three new industrial parks in Kota Belud, Beaufort, and Kudat for the Blue Economy Industrial Park in line with the focus on creating a stable, transparent, and supportive environment for investments to flourish.
