Singapore-based commodities trader Trafigura Group Pte Ltd has set up a joint venture (JV) with Australian fund manager IFM Investors with a goal to deploy over 2 GW of renewables capacity in the next few years. The new entity, named Nala Renewables, will invest in solar photovoltaic (PV), wind and storage projects globally. The oil and metals trader plans to use clean energy at some of the sites to help power its mining, smelting and port operations.
The JV will focus on projects located in markets where Trafigura already operates, mainly in Europe, Asia and select emerging markets. The capacity will be installed in proximity to Trafigura Group’s mining, port and smelting infrastructure assets so that some of them are powered with electricity from the new plants. With Trafigura targeting solar and wind plants and energy storage facilities with the new business, Nala Renewables will start with around 250 MW of project capacity which its parent company has been developing.
Trafigura executive chairman and CEO Jeremy Weir said: “The energy transition is driving the need but also provides the opportunity to make strategic, long-term investments in renewable energy. The investments will provide synergies for our new Power and Renewables trading division, which is going to become a significant pillar of our trading activity over the next few years and beyond, and builds on our capabilities and understanding of other energy markets.”
REGlobal’s Views: With this move, another major oil and gas company has diversified into renewables space, reiterating the ongoing energy transition trend. A deep pocketed player like Trafigura will further boost investor confidence in the space. The planned projects will bring about $2 billion of investments into the sector.