Saudi Aramco, the national oil company of Saudi Arabia, has created a renewables investment unit as it seeks to boost sustainable energy use at home.
The Saudi Aramco Energy Ventures (SAEV) fund is part of a push to reduce the kingdom's use of oil and natural gas to generate electricity.
"As we continue to address long-term energy challenges, SAEV will help us more effectively engage with the global community of innovators and entrepreneurs who are increasingly important enablers of growth and value in our industry," said Khalid Al Falih, the president and chief executive of Saudi Aramco.
The company did not reveal the value of the investment planned by the new venture.
Saudi demand for electricity is predicted to rise to about 88 gigawatts this year, while natural gas, the main fuel in the country's power plants, is also needed as feedstock by the growing petrochemicals industry.
This has prompted Saudi Aramco to develop its gas resources, a costly undertaking given the sulphur-rich nature of much of its gas reserves.
Faced with a shortage of gas, the kingdom is diverting increasing amounts of crude to its power plants, eating into export revenue.
King Abdullah City for Atomic and Renewable Energy (Kacare), the government body responsible for devising the kingdom's policy on alternative energies, responded this year with a strategy to install vast solar power generation capacity. According to Kacare, solar power will account for up to 41 gigawatts by 2032.
The push for alternative energies is allied to efforts to create jobs in a country with high levels of unemployment, and the government is keen to see a manufacturing industry grow around its solar parks. The new private-equity fund will help to bring the needed technologies to Saudi Arabia.
"Our mission is to invest globally into start-up and high-growth companies with technologies of strategic importance to Saudi Aramco and to accelerate their development and their deployment in the kingdom," SAEV states on its website.
The new venture will also invest in energy efficiency, water technology, and upstream and downstream oil and gas innovations.
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