Malaysia’s state oil and gas giant Petronas on Monday said its corporate venture capital arm, Petronas Ventures, has inked an agreement with SOLS Energy Sdn Bhd to invest in the solar photovoltaic (PV) system startup.
The startup provides sustainable energy for residential and small-to-medium enterprise sectors in Malaysia.
This is Petronas’s second venture capital investment initiative that aims to strengthen its commitment in the renewable energy space as a solutions partner, the company said in a statement.
The transaction is expected to be completed at the end of July this year.
The deal comes at a time when oil prices have dampened due to lower demand as several countries implemented lockdowns and movement restrictions to contain the highly-infectious COVID-19 pandemic.
The deal also closely follows Petronas’s announcement of its investment in Braintree Technologies, an agri-tech startup based in Malaysia, last month.
SOLS Energy designs, distributes, maintains and installs solar energy systems at a competitive rate. It also runs the first Solar Academy in Malaysia that offers technical skills pertaining to the industry.
“We believe that this investment will complement Petronas’ new energy business growth in the solar market, as the SOLS Energy team has the passion and determination to propel the sustainable industry.” Petronas Ventures Mohd Azli Ishak said.
The initiative with SOLS Energy is in line with Petronas’ Sustainability Agenda and the United Nations’ Sustainable Development Goals (SDGs) 4, 7, 8 and 13 that focus on the provision of quality technical education to youth, promotion of sustainable economic growth as well as a reduction in greenhouse gas emissions through the generation of clean energy.
SOLS Energy’s Chief Executive Officer Raj Ridvan said, “We believe solar PV system adoption is at an inflection point in Malaysia, and with the Government’s regulation on Net Energy Metering and lower equipment cost, we see a huge potential market size in Malaysia and South East Asia.”
A 2019 graduate of Petronas’ FutureTech Accelerator programme, SOLS Energy also counts 500 Startups as one of its investors.
Petronas Ventures is a $350-million fund launched in October 2019, with an aim to make direct investments in areas such as industry 4.0, advanced materials and specialty chemicals and energy.
Last year, Petronas said it is considering investing in renewable energy such as solar, wind and biomass at a commercial scale in light of the demand for more sustainable energy sources.
The new ventures will also support the then Ministry of Energy Science Technology Environment and Climate’s initiatives to reduce carbon emission intensity by 45 per cent per gross domestic product per capita by 2030, while achieving a low-carbon economy status by 2050.