Salmon Evolution gets grant for flow-through technology development

More og Romsdal, Norway-based Salmon Evolution AS has received a commitment of EUR 9 million (USD 11 million) in grant aid from Norwegian government-owned enterprise Enova.

The grant will be used for ongoing construction work on Salmon Evolution’s innovative hybrid flow-through fish farm, situated in an abandoned quarry at Indre Harøy, on Norway’s west coast.

Norway’s government has set the goals of increasing aquaculture production five-fold nationwide over the next 30 years, and of lowering lower greenhouse gas emissions by 90 percent.  Enova is supporting the aquaculture sector’s effort to cut emissions and increase profitability by being more energy-efficient and climate-aware.  

“With this support, Enova is contributing to our realisation of tomorrow’s solutions for salmon farming. Our strategy of establishing a significant low-emission salmon production facility on land remains unchanged,” Salmon Evolution CEO Håkon André Berg said.

Salmon Evolution’s close-containment farm is being developed in three phases, with the first phase scheduled to provide an annual harvest of 9,000 metric tons (MT) per year from the fourth quarter of 2022. The overall project will have an annual capacity of 36,000 MT from 2028. 

Work on laying the foundations and the construction of 12 grow-out tanks at Indre Harøy is progressing according to plan, with a contractual target price of NOK 1.3 billion (USD 149 million, EUR 123 million), according to the company’s Q3 results. The main contractor is Artec Aqua.

The project’s second phase will add a further 12 grow-out tanks at an additional cost of NOK 1.2 billion (USD 138 million, EUR 114 million), plus a smolt and hatchery facility. Phase 3 will construct 24 grow-out tanks, 4 holding tanks, and an intake station at a cost of NOK 2.1 billion (241 million).

The production cost of salmon is expected to reduce over time, from an initial NOK 40.80 (USD 4.68, EUR 3.87) per kilogram, to NOK 38.60 (USD 4.43, EUR 3.66) per kilo in Phase 2, and a target of NOK 36.10 (USD 4.14, EUR 3.43) per kilogram when at full capacity.

Salmon Evolution also has global plans, an ambition to be among the leading players in the market, and a roadmap towards a harvest of 70,000 metric tons HOG by 2030, the company said. To achieve this, the company has signed a term sheet with Dongwon Industries for a potential joint venture on international expansion, including the construction of a 12,000 MT farm in South Korea, in addition to sales and marketing collaboration. The intention is initially to target the European salmon market, while investigating potential in the U.S.A. and Asia.

To fund the Norwegian project, Salmon Evolution secured both equity and debt financing in 2020. A private placement in March 2020 raised NOK 258 million (USD 29.6 million, EUR 24.5 million), and in July, Dongwon invested NOK 50 million (USD 5.7 million, EUR 4.8 million) for a minority stake in the company. In September, a private placement raised NOK 500 million (USD 57.4 million, EUR 47.5 million) in connection with the listing on Oslo’s Merkur Market. During the third quarter, the company also secured debt financing of NOK 40 million (USD 5.6 million, EUR 3.8 million) for land acquisition on Indre Harøy.

“Global demand for salmon continuously is growing, and we are convinced that land-based farming is crucial to solve the industry’s growth challenge. It’s truly a sustainable approach to producing one of the world’s best and healthiest proteins. Using new technologies for sustainable and stable production, we believe our project has great potential to produce what the market demands – a fresh, healthy and premium product that has minimum impact on the environment,” Berg said.

Photo courtesy of Salmon Evolution