IFM, Trafigura create renewables venture to target 2GW portfolio

Fund manager IFM Investors has formed a joint venture with commodity trader Trafigura to invest in a solar, wind and power storage projects globally.

The companies have created Nala Renewables to build a two-gigawatt portfolio of renewable energy projects, to be operating, in construction or in late-stage development within the next five years.

Trafigura will contribute around 250MW of projects under early-stage development to the venture, and provide a long-term offtake agreement to some of the renewable assets on market terms.

Nala Renewables will identify, build and operate projects that produce renewable energy in markets in which Trafigura already operates – primarily Europe, Asia and certain emerging markets.

In addition to developing greenfield projects, the newly created company will pursue opportunities to acquire assets or companies at varying stages of development that fit the investment profile of the portfolio.

Trafigura said the business would also build and operate projects adjacent to the Trafigura’s mining, port and smelting infrastructure assets worldwide. The renewable energy generated would be used to power some of those facilities.

The latest initiative deepens a relationship IFM Investors has forged with Trafigura. In 2018, they formed a 50-50 joint venture through the Impala Terminals joint venture to own and operate a network of concentrates terminal infrastructure in Mexico, Spain and Peru.

“Energy transition is driving the need, but also provides the opportunity to make strategic, long-term investments in renewable energy, said Jeremy Weir, executive chairman and CEO of Trafigura.

“The investments will provide synergies for our new power and renewables trading division. This 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.”

Kyle Mangini, global head of infrastructure at IFM Investors, described the joint venture as an important step in the firm’s strategy to reduce the carbon impact of its investments.

“We look forward to continuing our successful partnership with Trafigura and tackling the energy transition together,” he said.

To read the digital edition of the latest IPE Real Assets magazine click here.