On April 13, 2021, the IDH Farmfit Fund signed an EURO 1.4 million investment deal into Chicoa Fish Farm, a Tilapia farm in Mozambique. The investment – taking the form of a convertible loan – will enable Chicoa to train smallholder farmers in raising Tilapia fish in cages and ponds, and will allow Chicoa to expand its capacity to supply these new farmers with fingerlings and feed. At the same time, the investment will support Chicoa in strengthening its supply-chain, creating a blueprint for the African aquaculture industry, and provide direct job opportunities for at least 350 smallholder farmers.
Roel Messie, CEO of the IDH Farmfit Fund: ‘We are proud to close the deal with Chicoa as our 1st investment. It is a great opportunity to improve the livelihoods of smallholder farmers and help build an African based aquaculture sector that can meet the growing demand for fish in the region. With these and future investments the IDH Farmfit Fund aims to prove investing in smallholder farmers is a new asset class for the finance world ’
The Fund will actively support the smallholder program of Chicoa and both parties have agreed upon milestones on smallholder impact, to be achieved during the next 5 years. ‘IDH Farmfit Fund will have a seat in the board supervising Chicoa. With 12 years of IDH experience in both tropical aquaculture and building smallholder programs, we can be of great support to Chicoa’, says Roel Messie.
Gerry McCollum, CEO of Chicoa: ‘For Mozambique as an LDC country it is important to develop its own fish production. It saves import costs, creates employment and increases high protein food security in a sustainable way. Smallholder farming is a perfect solution to protein production in areas with poor infrastructure. Any smallholder program requires good supply of quality feed and fingerlings, coupled with training and equipment. IDH is a brilliant partner by not only enabling Chicoa to be in a position to meet these requirements but also using their extensive smallholder experience to help us structure a successful program. ’
‘With this deal we see the ecosystem approach of IDH Farmfit at work’, says Roel Messie. ‘First our IDH Farmfit team analyzed the opportunities for a smallholder program with Chicoa. Then the IDH Aquaculture team supported Chicoa in implementing its recommendations and now the IDH Farmfit Fund is investing in the smallholder program.’
Aquaspark is a global investment fund based in the Netherlands that develops optimal aquaculture food system by investing in companies all along the aquaculture value chain. Aquaspark was one of the first investors in Chicoa and is since 2015 a major shareholder. Mike Velings and Amy Novogratz, Cofounders of Aqua-Spark – “This an exciting step for Chicoa and for the African aquaculture industry. Catalyzing a regional sustainable aquaculture industry has always been a part of the vision and now with IDH as a partner, bringing their technical assistance and supply chain knowledge, it will come to fruition.
Fish consumption in Africa has for decades been significantly increasing, from 5.2 kilograms per capita in 1960 to almost 10 kilo in 2019. Coupled with a fast growing population this means fish demand has exploded which has not been met by domestic production, but by expensive imports. Mike Velings and Amy Novogratz of Aquaspark: ‘Chicoa is a cost effective, environmentally friendly producer of quality protein in an area with nutritional challenges. They have built a world class Tilapia operation from the ground up and are ready to scale. We hope Chicoa will provide a sustainable blueprint for an aquaculture industry to flourish across Southern Africa and further prove the investment case. ‘