Offshore support services firm SBI Offshore, hit by the slump in oil prices, is diversifying its business into solar energy to cater to growing demand for renewable energy.

Catalist-listed SBI said yesterday that it has struck a joint-venture deal with Germany's Grass Group to build and operate solar photovoltaic farms and systems internationally.

SBI holds a 51 per cent stake in the joint-venture company, Graess Energy, while Grass Group's GSS Renewables owns the rest.

SBI is currently negotiating the acquisition of existing Grass Group assets for Graess Energy, including photovoltaic projects that are already up and running.

SBI executive chairman Chan Lai Thong said that this diversification into renewable energy had an eye towards growing Asia-Pacific energy demand.

The business will provide a new source of revenue in addition to its base in offshore support services.

Mr Chan said that while the offshore sector remains the "first pillar" for SBI's operations, "everyone has suffered (because) the market has softened" with falling oil prices.

Solar energy became an attractive diversification option for SBI owing to growing demand for renewable energy worldwide and also because of the scalability of solar power generation.

The company has been negotiating nine or 10 prospective deals in Japan, said Mr Chan, and is also looking to countries in the region such as Thailand. He hopes to have at least one deal secured by the end of the year.

Mr Chan also said that SBI hopes to play to its strengths in offshore and marine services by exploring nascent floating solar-panel technology on top of more conventional rooftop arrays.

He pointed to the company's technical familiarity with the challenges of wind, waves, and salt-water corrosion, and added that a small floating project in the Maldives is being discussed.

Singapore's growing interest in solar power is cause for optimism at Graess Energy as well. Last month, the Housing Board called for the first and largest multi-agency solar leasing tender to date, while the Economic Development Board has set a target of 350 megawatts of solar electricity generation by 2020.

As a result of this joint venture, Grass Group, which has been implementing solar energy projects since 2000, also intends to relocate its headquarters from Switzerland to Singapore.