Pipeline operators and oil traders are expanding into renewables to offset greenhouse-gas emissions, improve environmental, social and governance ratings and gain broader access to capital as they face mounting investor pressure to clean up their operations. Diversifying into renewables also allows the companies to tap into a faster-growing part of the energy industry.
“We want to participate in energy transition. We see it as an opportunity,” Clark Smith, Buckeye’s chief executive officer, said in in an interview. “Our strategy moving forward is going to be a more diverse business model.”
The deal is the inaugural acquisition for Nala Renewables, a joint venture of Trafigura and institutional fund manager IFM Investors, according to a statement. Buckeye and Nala will hold 85% of the equity in Swift, whose management team will remain in place and have minority ownership. Buckeye is a wholly owned subsidiary of the IFM Global Infrastructure Fund.
Traders are making big bets on renewables. Vitol Group, the world’s largest independent oil trader, said it’s already committed more than $1 billion to renewables projects. Gunvor Group Ltd. plans to invest at least half a billion dollars in non-hydrocarbon fuels and technology.
Swift Current has developed more than 1.1 gigawatts of renewables projects since its founding in 2016. The Boston-based company has a pipeline of more than 6 gigawatts of solar, wind and energy-storage projects.