IFC backs Entobel, but private sector remains cautious of investing in insect-based aquafeed

The International Finance Corporation (IFC) has stepped in to help Vietnam-based insect feed producer Entobel to reach scale in what could be a decisive boost of confidence in a sector facing worries over costs and scale of production.

A World Bank entity focused on supporting the private sector, the IFC is helping Entobel build what will be the region’s largest insect meal plant to date in the Vung Tau province of Vietnam. Neither Entobel nor the IFC confirmed the exact cash figure involved in the deal, which involves an equity stake for IFC.

The plant, which aims to produce 10,000 metric tons (MT) of insect-based meal annually for aquafeed and pet food makers, is part of “a significant drive by the aquafeed sector to reduce the use of wild-caught fishmeal in aquafeed diets and to seek more sustainable sources of protein,” explained Thomas Jacobs, IFC’s Hanoi-based manager for Southeast Asia.

“There has been uncertainty in the sector regarding its ability to scale up and produce in quantities and at price points that make insect meal price-competitive with fishmeal and soy,” Jacobs told SeafoodSource. “The IFC can play an important role in supporting producers of aquafeed and of alternative ingredients in their expansion plan, sustainability practices and in their search for enhanced feedstock formulations.”

Historically, the appetite of investors in the aquaculture space has been confined to a handful of integrated players and salmon companies, with many in the sector looking for government support to de-risk new projects for private investors. But Jacobs said there has been increase in institutional and private-sector investments in the alternative aquafeed sector globally

“As the sector’s production scales up globally and technologies improve, insect feed will become competitive with fishmeal and potentially with soy in some regions,” he said.

One of those regions is Southeast Asia, he said. Southeast Asian countries have been eager to attract the alternative aquafeed sector both for its economic promise and for its potential to address the region’s food security concerns. Demand for alternative aquafeeds is growing fast as non-plant aquaculture production is expected to pass 100 million MT in 2027, growing to 106 million MT in 2027, according to the Food and Agriculture Organization (FAO) of the UN. 

Besides Entobel, other insect-focused companies operating in Southeast Asia include …

Photo courtesy of Entobel