Trafigura – one of the world’s largest independent oil traders – plans to build a 2GW renewable energy portfolio after forming a joint venture called Nala Renewables with partner IFM Investors.
Nala Renewables will back wind, solar and energy storage projects “in Europe, Asia and certain emerging markets”, either through greenfield development or acquisitions, said a statement announcing the new venture.
Nala will also build projects next to some of Trafigura’s assets in the mining, ports and smelting sectors, which will take power from the facilities under offtake agreements. Trafigura will contribute a 250MW development portfolio it holds to the new company.
The JV wants to have 2GW operating or in late-stage development within five years, and will recruit an initial 15 specialist renewables staff with more expected to follow.
Singapore-based Trafigura and IFM did not specify a value of investments Nala expects to make to reach the 2GW target.
The move into development by commodities giant Trafigura – which traded 2.2 billion barrels of oil and petroleum products in 2019 – follows its creation of a specialist power and renewables arm, which it said is poised “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”.
Jeremy Weir, CEO of Trafigura, said: “The energy transition is driving the need, but also provides the opportunity to make strategic, long-term investments in renewable energy.”
Trafigura’s bid to deepen its footprint in clean electricity reflects the shift of fossil producer giants such as Shell, Total and BP, all of which have stressed their energy-trading experience as a competitive advantage as they enter new renewable energy markets.
BP recently cited energy trading as one of the factors that would help it add value to, and drive up returns from renewables investments as the supermajor undertakes its own ambitious energy transition strategy.