A Malaysian power systems specialist has struck a deal with a Hong Kong battery storage firm to pursue large-scale projects aimed at helping the country prepare its electricity grid for more renewable energy.

The two-year agreement between Mikro MSC Berhad and Hong Kong Cospower Technology Co Ltd (HKCT) makes the company HKCT’s exclusive strategic partner in Malaysia for utility-scale battery energy storage system (BESS) projects.

Such battery systems are meant to address one of solar power’s biggest challenges: storing electricity generated during the day for use when demand rises.

The tie-up comes as battery makers expand overseas to meet rising demand for electric vehicles and stationary storage, while Sino-US trade tensions push companies to diversify production outside China.

The companies will jointly “identify, develop, negotiate and execute storage projects” linked to the national grid, including solar-plus-storage and selected commercial and industrial schemes, according to a press release.

The deal was signed in Kuala Lumpur on Wednesday in the presence of Deputy Prime Minister Fadillah Yusof, who also holds the energy transition portfolio. It comes as Malaysia prepares to roll out its first major grid-scale battery procurement under MyBeST, a programme overseen by the Energy Commission.