Trafigura and Financing Partners establish "Low Carbon Aluminium" financing facility
Geneva, 8 September 2020 – Trafigura Group Pte Ltd. (“Trafigura”), a market leader in the global commodities industry and one of the world’s chief independent aluminium traders, has established a ‘low carbon aluminium’ financing platform of up to USD500 million. Natixis and Rabobank supported Trafigura in the design and structuring of this innovative instrument.
As the first financing of its kind for Trafigura and for the wider market, the facility has been designed to meet growing demand from downstream manufacturers for low carbon aluminium and to support upstream producers in accelerating their transition to low carbon technologies. The platform will enable Trafigura to access financing at a preferential interest rate and, in turn, to pay a premium to low carbon aluminium producers. It follows Trafigura’s establishment of a low carbon aluminium trading desk in 2019, the first commodity trader to do so.
Aluminium is expected to be a major enabling material for the transition to a low carbon economy due to its low weight, high recyclability and wide range of applications across diverse industries including transport, packaging and consumer goods, and building and construction.
Numerous regulatory and voluntary initiatives have sought to improve the emissions and energy intensity of the aluminium production sector, but there is still no official market definition of ‘low carbon aluminium’. Through this new financing, and in coordination with Natixis and Rabobank, Trafigura has developed a methodology that sets out clear parameters for low carbon aluminium production, drawing on existing recommendations and standards such as those formulated by the EU Technical Expert Group on Sustainable Finance and the Aluminium Stewardship Initiative (ASI).
“The metals industry has an important role to play in the fight against climate change. Trafigura is committed to facilitate the transition towards a sustainable aluminium supply chain,” said Philippe Müller, Global Head of Aluminium and Alumina Trading for Trafigura. “For aluminium, our objectives are to secure long-term low carbon aluminium supply for our customers, to support the efforts of our business partners as they invest in decarbonisation and ultimately to create efficient linkages between suppliers and end-users. We’re already seeing increased demand for low carbon aluminium particularly from the European automotive industry and the packaging industry worldwide,” concluded Philippe.
Orith Azoulay, Global Head of Green & Sustainable Finance, Corporate & Investment Banking at Natixis said: “The environmental transition of many industries will rely, in large part, on the creation of a low carbon aluminium value chain from extraction to final use. This financing marks the first milestone on this journey, notably by engaging key stakeholders on this value chain and by establishing the necessary technical and price signals. We are proud to have supported Trafigura in this financing, drawing on our historical expertise in commodity trade finance and leadership in sustainable finance. As demonstrated through our innovative Green Weighting Factor mechanism, Natixis has put the transition to a lower carbon economy at the heart of its business strategy and client strategic dialogue.”
Rabobank’s Global Head of Trade & Commodity Finance, Jasper van Schaik said: “It is great to see that Trafigura is taking a pivotal role in the transition towards a low carbon economy in the aluminium supply chain. We are honoured to provide Trafigura with our support through this innovative low carbon aluminium financing solution. It is an excellent example of Rabobank’s mission: Growing a Better World Together. We fulfil this mission by drawing on our longstanding client relationships and partners in the commodity supply chain. Our global coverage as a well-recognized commodity finance bank helps us to initiate, facilitate, encourage and support sustainability initiatives of our trading clients by providing them with tailored financing structures, unique expertise, dedicated people and a global network.”
For further information please contact:
Natixis Press Office:
+33 1 58 19 10 40
+33 1 58 19 34 16
Trafigura Press Office: +41 (0) 22 592 4528 or firstname.lastname@example.org
Natixis is a French multinational financial services firm specialized in asset & wealth management, corporate & investment banking, insurance and payments. A subsidiary of Groupe BPCE, the second-largest banking group in France through its two retail banking networks, Banque Populaire and Caisse d’Epargne, Natixis counts nearly 16,000 employees across 38 countries. Its clients include corporations, financial institutions, sovereign and supranational organizations, as well as the customers of Groupe BPCE’s networks. Listed on the Paris stock exchange, Natixis has a solid financial base with a CET1 capital under Basel 3(1) of €11.6 billion, a Basel 3 CET1 Ratio(1) of 11.2% and quality long-term ratings (Standard & Poor’s: A+ / Moody’s: A1 / Fitch Ratings: A+).
(1)Based on CRR-CRD4 rules as reported on June 26, 2013, including the Danish compromise - without phase-in. Figures as at 30 June 2020
Rabobank is a global financial services leader providing wholesale and retail banking, leasing, and real estate services in more than 40 countries worldwide. Founded over a century ago, Rabobank today is one of the world’s largest banks with over € 590 billion in assets. Being a cooperative, Rabobank is dedicated to working together with customers, members and partners to create a more resilient living environment and to offer their customers services that contribute to global transitions in sustainability.
Founded in 1993, Trafigura is one of the largest physical commodities trading groups in the world. Trafigura sources, stores, transports and delivers a range of raw materials (including oil and refined products and metals and minerals) to clients around the world. The trading business is supported by industrial and financial assets, including a majority ownership of global zinc and lead producer Nyrstar which has mining, smelting and other operations located in Europe, Americas and Australia; a significant shareholding in global oil products storage and distribution company Puma Energy; global terminals, warehousing and logistics operator Impala Terminals; Trafigura's Mining Group; and Galena Asset Management. The Company is owned by around 700 of its 8,000 employees who work in 80 offices in 41 countries around the world. Trafigura has achieved substantial growth over recent years, growing revenue from USD12 billion in 2003 to USD171.5 billion in 2019. The Group has been connecting its customers to the global economy for more than two decades, growing prosperity by advancing trade.