Kenyan aquaculture firm Victory Farms has received a USD 15 million (EUR 12.7 million) mezzanine loan from African agribusiness investment firm AgDevCo for the expansion of its fish-farming operations in Eastern Africa.
AgDevCo said the loan complements a USD 4 million (EUR 3.4 million) investment it made in Victory Farms in 2021 and aims to support the company's continued expansion across the region, including “scaling existing operations in Lake Victoria in Kenya and Lake Kivu in Rwanda and advancing early-stage establishment in Tanzania to enable Victory Group to meet rising regional demand, enhance price stability for consumers, and deepen its impact across East Africa.”
AgDevCo Investment Director John Jakobsson said Victory Farm's management team in particular has inspired confidence, especially after the 2021 investment was effectively used to ramp up production and improvement of operational efficiencies.
“We are delighted to put our capital to work to drive more impact in the region,” he said.
The loan, which makes AgDevCo the largest investor in Victory Farms, comes as Victory Farms is awaiting approval from Kenyan authorities for the construction and deployment of a modern tilapia cage system on the Kenyan side of Lake Victoria worth USD 5.8 million (EUR 4.9 million). Though Victory Farms has not confirmed when the development of its tilapia cage system project in Lake Victoria will commence, the project is slated to result in annual production of 30,000 metric tons.
In its application to Kenya's National Environmental Management Authority (NEMA) for the project, Victory indicated it will construct new high-density polyethylene (HDPE) floating surface cages on a 390-acre concession block in the counties of Homabay and Migori, both bordering the regional freshwater fishery.
The project will have to contend with environmental risks inherent to fish farming on Lake Victoria. For instance, recently, heavy rains caused alarm over the possibility of a mass die-off of farmed Nile perch and tilapia in Lake Victoria.
The Kenya Marine and Fisheries Research Institute (KMFRI) warned that the rains may have caused dissolved oxygen levels in Lake Victoria to drop – a phenomenon that can be lethal to farmed fish species.
Nevertheless, in its recommendation to NEMA for the approval of the Victory Farms project, Kisumu, Kenya-based Lakers Consultancy, which performed a third-party environmental and socioeconomic audit on the project, said the undertaking is viable and recommended NEMA greenlight it "since the environment impact assessment process reveals that this project does not have serious negative environmental impacts, and for the impacts identified, adequate mitigation measures have been spelled out in the environment management plan."
