FinnFund Boosts Zambian Aquaculture with $6m Investment in Yalelo

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FinnFund, a Finnish impact investor focused on sustainable investment opportunities in developing countries, has made its first direct investment in Zambia with a $6 million commitment to integrated aquaculture company, Yalelo Limited.

Yalelo, which is currently the largest aquaculture company in Africa, plans on using the capital to more than double its annual production from 12,000 tons of tilapia to 25,000 tons.

With extensive natural resources, Zambia has an established wild fishery industry, however, population growth has already led to overexploitation and a national seafood supply gap of 50,000 tons, which the country is offsetting through imports from Asia.

In light of this, the Zambian government has identified aquaculture as an industry that can help remedy the supply shortage and increase food security for the country. In 2016, the Zambian Fisheries Department launched the Zambian Aquaculture Enterprise Development Project (ZAEDP), and with $51 million in backing from the African Development Bank, the program shifted into operation last year.

“The aquaculture sector can transform the availability and affordability of high-quality protein in a resource efficient and sustainable manner,” said Jari Matero, associate director and head of agri and forestry portfolio for FinnFund.

As a sustainable large scale tilapia farmer, Yalelo is not only helping to close the supply gap, but is doing so by producing a protein that carries a much lower carbon footprint compared to pork or beef, while also providing vital employment opportunities at its production site and along the value chain. Currently the company has 800 employees, of which 30 percent of the management is female, and with this investment from FinnFund, is planning on adding an additional 200 people to its team.

“With this investment, we will expand our capacity and respond to the need for affordable, high-quality protein,” said Adam Taylor, chairman of Yalelo. “We take pride in providing our employees with jobs in a vulnerable rural area where few alternative employment opportunities exist.”

Not only will this capital investment help Yalelo achieve its strategic goals, but other recent investments along the supply chain in Zambia will serve to advance the industry as a whole, and create a landscape in which growth is easier to achieve.

In May of last year, Pan African mid-market private equity manager EXEO Capital announced an investment of US$6.4 million in Capital Fisheries, a leading food distributor in Zambia specializing in cold chain distribution of animal proteins.

Founded in 1999 by Damian Roberts and Gavin Thomas, Capital Fisheries sells fish (mainly tilapia, bream, or horse mackerel) that has been sustainably harvested in Zambia, Zimbabwe, and Namibia. The company has also added smoked fish to its product lines, along with fresh, locally sourced beef and sausage from Zambia and select imported goods. All of the company’s value-added fish and meat products are processed in a modern facility located in Lusaka.

In the past, one key factor that hindered growth in the Zambian aquaculture sector was the lack of availability of aquaculture feed and fingerlings, according to Farmers Weekly. However, today there are five tilapia feed companies in the country.

One of these, Skretting Zambia, was created in 2016 when Dutch animal nutrition and aquaculture feed company Nutreco announced it had entered into a 75/25 joint venture with African Century Foods (ACF), the largest aquaculture group in Africa, and part of the operating investment company Africa Century Group, to launch the country’s first dedicated fish feed facility.

Beyond increasing capacity and expanding employment, Yalelo also operates an extensive internal training program offering courses on aquaculture, business, and leadership, and external community courses geared toward literacy and numeracy, and aims to be the first Aquaculture Stewardship Council (ASC) certified tilapia farm in sub-Saharan Africa. Source: Global AgInvesting

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