The investment arm for Australia’s industry superannuation funds has struck a deal with a global oil trader to form a new multi-billion-dollar joint venture to targeting investments in new renewable energy and battery storage projects.
Nala Renewables has been formed as a joint venture between IFM Investors, which manages around $140 billion in assets and investments on behalf of Australia’s industry super funds, and international oil trader Trafigura Group.
The joint venture will be provided with A$2.82 billion to invest in new wind, solar and storage projects across a range of international markets, and will provide new exposure to IFM Investors to low carbon opportunities, which are in high demand from superannuation customers.
The new fund will look to build a portfolio of up to 2,000MW of renewable energy projects over the next five years, including projects across all stages of the development cycle. This could see the fund purchase ownership stakes in already operational wind and solar projects, as well as those under construction or in the later stages of development.
Nala Renewables will kick-start the building of its portfolio with 250MW of early-stage projects already being developed by Trafigura, and will be handed over to be managed by the joint-venture.
Trafigura, which is headquartered in Singapore, is primarily involved in the trading of physical commodities, including metals and energy products. The company operates a number of infrastructure assets across Europe and Asia, including mining, port and smelting infrastructure, and the company is looking to co-locate new renewable energy projects at these sites to use zero emissions sources of energy to power these operations.
Trafigura will serve as the off-taker for a number of projects developed by Nala Renewables, with the projects set to power the company’s infrastructure portfolio.
“The energy transition is driving the need, but also provides the opportunity to make strategic, long-term investments in renewable energy,” CEO of Trafigura, Jeremy Weir said.
” 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.”
The new entity, Nala Renewables, will also explore opportunities for greenfield developments, but it is unclear whether this could include developments in Australia.
It is understood that the new joint-venture is not currently targeting Australian projects for its initial round of investments, and will target markets where Trafigura has an existing presence, but has not ruled out investing in Australian wind, solar or storage projects in the future.
IFM Investors has previously partnered with Trafigura in an investment in the Impala Terminals joint venture, located across Mexico, Spain and Peru, which includes infrastructure supporting the transport and storage of base metals.
The investment fund has sought opportunities to reduce the carbon footprint of its investment portfolio, including by partnering with the Clean Energy Finance Corporation to reduce greenhouse gas emissions from its investments in major infrastructure assets, including Melbourne Airport.
“We look forward to continuing the successful partnership with Trafigura and tackling the energy transition together,” global head of infrastructure at IFM Investors, Kyle Mangini said. “This joint venture is an important step in our strategy to reduce the carbon impact of our investments.”
The joint-venture will include an initial team of 15 staff to develop its investment portfolio, with expertise in renewable energy developments, with the team expected to grow as the fund’s portfolio matures.