The Aqua-Spark Africa Fund, which will go live in the last quarter of 2021, will initially close at $50m and will expand to $300m over the next six to eight years.
The initial $50m of the Africa fund will kick-start the first phase of development of sub-Saharan Africa’s aquaculture sector, said the investors.
Ahead of that financing scheme going live, a new report from Aqua-Spark meanwhile addresses why and how farmed tilapia can and should play an important role in solving sub-Saharan Africa's challenge to produce sufficient food for its growing population.
It is the first publication in a new, free series of reports called Aqua Insights, with Willem van der Pijl at the helm as editor in chief.
The series is aiming to provide investors and industry stakeholders with an introduction to different segments of the aquaculture industry, to illustrate how sustainable aquaculture is fundamental to addressing the protein challenge and ensuring their buy-in in terms of supporting that objective, said Mike Velings and Amy Novogratz, co-founders of Aqua-Spark.
“We believe that reliably meeting the world’s growing demand for protein while simultaneously sustaining our environment will require a radical transformation of global aquaculture, which needs to be a large-scale collaborative effort between diverse stakeholders and investors committed to supporting innovation and long-term growth.
“We intend to openly and freely showcase the insights we've gathered over the last ten years to help shape the development of a sustainable aquaculture industry and catalyze investment towards scaling."
Taking tilapia in sub-Saharan Africa to the next level
This first report is addressing tilapia production because of the potential of that sector to help feed a population that will double to two billion by 2050, said the authors.
“By 2050, demand for fish is likely to reach between 16-29 million Mt per year. Due to overexploitation, wild catch can’t be increased, and thus won’t be able to meet the additional demand. Even if alternative proteins start playing a larger role, we at Aqua-Spark believe that aquaculture production will have to accelerate. We’ve identified tilapia to be the fish to do so: it’s scalable and it’s healthy, sustainable, and affordable.”
The review assesses the current geography of tilapia production, the producers involved, and the various segments of the supply chain from feed to genetics and hatcheries, to health, tech, and marketing and distribution. It also looks to provide insights into the challenges that the sector is confronted with, and an overview of the investment opportunities and the existing investment landscape.
“Even though in some markets in sub-Saharan Africa tilapia prices may, at present, still be around $3-3.5/kg, a future retail price of $2-2.5/kg is realistic. These prices require tilapia farmers in sub-Saharan Africa to reduce their production costs to at least $1.5-2/kg. This calls not only for investments to scale up farms, but also investments along the value chain to improve genetics, hatcheries, feed ingredients, feed availability, and the application of farming technology,” stressed the authors.
Aqua Spark has invested in 21 complementary SMEs since 2015. To date, it has €200m ($235m) in assets under management, dedicated to investments in elements of the aquaculture industry that will make fish farming sustainable. It backs aquaculture companies across the value chain—spanning farming operations, alternative feed ingredients, disease-battling technology, and consumer-facing aquaculture products.