Singapore-based renewable energy certificate (REC) service provider REDEX revealed on Tuesday that it has successfully secured $10 million in funding from a group of investors, with Aramco Ventures, a subsidiary of Saudi Aramco, leading the way. Additional investors hailing from the Middle East, Southeast Asia, and Japan have joined this strategic funding initiative, as announced in a company statement. However, the specific names of these new investors remain undisclosed.
REDEX, under the leadership of founder and CEO Jen-Wee Kang, has outlined an ambitious expansion plan beyond its current Asian operations. Kang stated, “We are planning to get into the Middle East and Latin America markets in 2024 through the partnership with our strategic investors,” with Saudi Arabia identified as a probable initial destination.
REDEX's core operation revolves around the provision of a platform catering to utilities across Asia, facilitating the registration, verification, and retirement of RECs. These renewable energy certificates represent 1 megawatt hour of electricity generated from renewable sources. The certificates are actively traded on REDEX's platform, with companies purchasing them as a means to offset their scope 2 emissions originating from fossil-fuel power generation.
While offset products, including RECs, have faced criticism for their potential to undermine climate change mitigation efforts by allowing continued fossil fuel consumption, they serve as a practical avenue for businesses to reduce their net emissions. Notably, RECs have also emerged as a lucrative income stream for renewable energy generators.
In an additional development, REDEX shared that, beginning in June, it initiated a partnership with China Southern Power Grid, one of China's state-owned power grid giants, aimed at supporting the company's emergence as a prominent REC issuer in the rapidly growing renewable energy market of China.