Singapore sovereign wealth fund GIC (GIC.UL) will invest $240 million in Arctic Green Energy to support the renewable energy firm's expansion in Asia and Europe, the companies said on Monday.

Arctic Green Energy focuses on the decarbonisation of the building sector and has a geothermal partnership with China's state-owned oil giant China Petroleum & Chemical Corp (600028.SS).

The funds would help Singapore-based Arctic Green Energy launch new projects and ramp up its capability in geothermal energy, which is derived from hot underground springs and is a greener alternative to using fossil fuels for heating and cooling.

JP Morgan acted as the sole placing agent for the deal.