PETRONAS, Malaysia’s state-owned gas and oil company, signed an agreement to invest in SOLS Energy Sdn Bhd, a solar energy startup.

The investment will help provide renewable energy to residential and small-to-medium enterprises (SMEs) in Malaysia. SOLS Energy is a Kuala Lumpur-based rooftop solar company, which mainly focuses on the residential and SME markets.

According to a press release, the transaction between PETRONAS Ventures, a subsidiary of PETRONAS, with SOLS Energy will be completed by the end of July 2020. However, it did not disclose the value of the deal.

“We believe solar PV system adoption is at an inflection point in Malaysia, and with government’s regulation on net energy metering and lower equipment cost, we see a huge potential market size in Malaysia and South East Asia,” said Raj Ridvan, Chief Executive Officer of SOLS Energy.

PETRONAS added that this investment marks its second venture capital investment initiative to strengthen its commitment to the international renewable energy space as a solutions partner.

Mercom previously reported that PETRONAS acquired Singapore based Amplus Energy Solutions Pte Ltd (M+) backed by I Squad Capitals in April 2019. This was PETRONAS’ first deal to enter the international renewable energy market. M+ focuses on commercial and industrial customers in India, to provide them with rooftop and ground-mounted solar power. The company has a portfolio of over 500 MW capacity under operation and development, with 275 projects across 20 states in the country.

Oil and gas majors like BP, Tokyo Gas, PETRONAS, Reliance Industries, Shell, and Total continue to be significant acquirers of solar companies. According to Mercom Capital Group’s recently released 1H and Q2 2020 Solar Funding and M&A Report, a total of 14.7 GW of solar projects were globally acquired in the first half of 2020. Of these, oil and gas companies accounted for about 6.5 GW or 45% of these acquisitions.

Meanwhile, last month, the country announced the launch of a 1 GW solar tender. The tender was floated under the fourth round of the nation’s Large- Scale Solar program initiated by the Malaysian government to attract investments in the renewable sector. This is the largest capacity ever tendered by the Malaysian government and can be seen as an effort by the government to boost the local economy following the COVID-19 crisis.