View of Indre Harøy's project including Phase 2 (the tanks at the top of the image).
Image: Salmon Evolution.
Last week, after completing a new round of funding, Salmon Evolution said all was set for Phase 2. Yesterday, the company announced the final investment decision for Phase 2 of Indre Harøy has been made and, accordingly, has signed an agreement with HENT and Artec Aqua whereby the Phase 2 farming project moves into the construction stage.
The Norwegian land-based salmon farming company has said that mobilization will begin shortly and that, as it announced in last week's update, construction is scheduled to start in the third quarter of 2024.
"We are now creating a foundation for substantial profitable growth, and with Phase 2 in full operation we will have a strong cash-flow generating platform with significant annual investment capacity," said Trond Håkon Schaug-Pettersen, CEO of Salmon Evolution. Therefore, they are ready, but, in addition, they are also fully funded.
As WeAreAquaculture reported last week, to fund the Phase 2 expansion, the company will use a combination of debt, equity cash at hand, and free cash flow. The project has an estimated investment of NOK 2.2 billion (EUR 195.2 million / USD 208.6 million), as well as NOK 200 million (EUR 17.7 million / USD 18.9 million) in project contingencies.
"We already had a very competitive bank package in place for Phase 2 with a little over NOK 1 billion (EUR 88.6 million / USD 94.7 million) in available bank facilities for the project. To fund the improved project, we have again received strong support from our bank syndicate, and NOK 675 million (EUR 59.8 million / USD 63.9 million) in new bank facilities as part of the total financing package," Salmon Evolution's CFO, Trond Vadset Veibust, explained then.
Just one day before, Salmon Evolution had completed a successful private placement raising approximately NOK 365 million (EUR 32.3 million / USD 34.6 million). "With these sources combined, we have fully funded Indre Harøy Phase 2," the CFO added.
So, with the final investment decision taken, it is now time to move ahead with Indre Harøy Phase 2 and implement the agreement with HENT and Artec Aqua the company anticipated just a year ago, in June 2023, when it had already started with the preliminary work that would continue in the following months together with the design of the project.
Now Salmon Evolution has said mobilization will begin shortly, with construction scheduled to start in the third quarter of 2024. As explained last year, the project will be split into two parts: HENT will assume responsibility for civil design and construction, while Artec Aqua will be responsible for the design, construction, and commissioning of the process facility.
With more than 40 years of experience in executing large and complex construction projects for public and private stakeholders in the Nordic countries, HENT is one of Norway's largest general contractors. Artec Aqua, a leading supplier of land-based aquaculture, is also a repeat provider to the Norwegian land-based salmon farming company, having already been a turnkey supplier for Phase 1 of Indre Harøy.
Finally, Salmon Evolution added that, in parallel with the start of Phase 2 construction, it is proceeding with the planning and engineering of the additional tank capacity. As the company explained last week, this will allow it to increase the weight of its stocks and also have a higher throughput at the farm, increasing the combined production capacity of Phases 1 and 2 from 15,800 to 18,000 tons. The Norwegian land-based salmon farming company has not yet made any final decisions or agreements for this part of the Phase 2 project.