Heat oil over medium-high heat in large non-stick skillet. Saute onions for 2 minutes, then add bell peppers, garlic and ginger and saute for 2 minutes more.
Add curry paste and peanut butter and saute for 1 minute. Add 1 ½ cans of coconut milk. Whisk cornstarch into remaining 1/2 can coconut milk then add to the pan. Stir well.
Add chicken, stirring to coat. Simmer for 10-15 minutes or just until chicken is no longer pink and sauce begins to thicken.
Stir in sugar, fish sauce, lime juice, and basil. Simmer for 5 minutes. Season with salt and pepper, to taste.
Serve over hot cooked rice.
Panang Curry Paste: Although you can make it from scratch, I never have those ingredients so prefer to buy it from Amazon or a local Asian market. I like the Mae Ploy Brand. Spice level: The spiciness of this dish will largely depend on the type and amount of curry paste you use. I have found Mae Ploy to be a little spicier than other brands (2 tablespoons is medium spicy). Veggies: This is a great recipe to “clean out your veggie drawer”. Try adding mushrooms, zucchini, bean sprouts, spinach, bamboo shoots or carrots.Chicken: You can substitute the chicken for shrimp or tofu.Rice: White, brown, or jasmine rice are best, or serve curry over zoodles or spaghetti squash. Vegetarian and vegan panang: Use a vegetarian curry paste (one that doesn't contain fish sauce or shrimp paste) like this one. Also omit the chicken and fish sauce from the recipe and add additional vegetables of tofu!Make ahead and Storing: This recipe will keep for 5-7 days in the refrigerator (and that makes it a fabulous MEAL PREP dish)! For even quicker meal prep, you can cut the chicken and slice the red bell peppers in advance.Freezing Instructions: Panang curry can be frozen for 2-3 months. Allow it to thaw overnight in the refrigerator and reheat on the stove or in the microwave. Cook rice fresh for serving.