Cold Storage Facilities
Cold Storage Facilities
Business Model Description
Establish cold storage facilities utilizing renewable energy. Silos could be built/owned/operated, or built and leased by experienced operators.
Expected Impact
Address food loss and waste issues as well as energy efficiency by investing in solar cold storages.
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
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Country & Regions
- Jordan: Countrywide
- Jordan: Balqa
- Jordan: Madaba
- Jordan: Karak
Sector Classification
Food and Beverage
Development need
Sustainability Development Report 2019: score of 45.4 on SDG 2 (Zero Hunger), of 92.2 on SDG 7 (Affordable and clean Energy), and of 94.8 on SDG 13 (Climate Action), with 'Challenges remaining' subscores prevalent across indicators (1).
Policy priority
In response to the challenges in the agriculture sector and food security, the government has developed the National Strategy for Agricultural Development 2020 – 2025 in addition to the National Water Strategy in line with the “Jordan 2025” (5).
Gender inequalities and marginalization issues
A small minority of women own agricultural lands in Jordan, most of which does not exceed an area of 2 hectares. Rural families headed by women tend to be among the poorest as they have fewer assets than male-headed families. (5b)
Investment opportunities introduction
The agricultural and agro-processing sector is an important contributor to the Jordanian economy. It produces 15-20% of GDP, accounts for 15.4% of total exports and is the third largest employer of about 15.3% of workforce and 52% of females in rural areas (2), (3).
Key bottlenecks introduction
The agriculture sector is one of the sectors that is vulnerable to several challenges like climate change and need to focus increasingly on water efficiency and climate change resistant plants. It consumes 456 million cubic metres of water per year (4).
Agricultural Products
Pipeline Opportunity
Cold Storage Facilities
Establish cold storage facilities utilizing renewable energy. Silos could be built/owned/operated, or built and leased by experienced operators.
Business Case
Market Size and Environment
USD 100 million - USD 1 billion
Only 50% of the fruit and 60% of the vegetable export potential is achieved, indicating an untapped export potential of US$ 320 million in vegetable and fruit (10).
Only about 30% of farmers / group of farmers have cold storage facilities (6)
Indicative Return
20% - 25%
IRR of 24% is observed for an initial investment of USD 13 million over 20 years for 112 system in a regional case study (9)
The roadmap on solar heating and cooling (International Energy Agency, 2012) gives a cost of US $1,600 to 3,200 per kW of cooling for big systems (8)
Investment Timeframe
Short Term (0–5 years)
Solar cooling storage technology is available worldwide, and the cost is decreasing, making it affordable and easily installable, which indicates a short term timeframe (11)
Market Risks & Scale Obstacles
Systems
Business - Supply Chain Constraints
Adoption
Impact Case
Sustainable Development Need
Only 30% of farmers have post-harvest pre-cooling facilities due to high energy cost (6). They extend such services to the other farmers against fees.
A significant share of production is lost in the value chain from farmer to exporter due to a lack of careful handling and cooled storage capacity.
Expected Development Outcome
Reduce operational cost, food and agricultural products waste.
Improve practices, optimize output and the quality of fresh fruits and vegetables.
Increase the contribution of renewable energy and lower greenhouse gas emissions.
Gender & Marginalisation
Primary SDGs addressed
2.3.1 Volume of production per labour unit by classes of farming/pastoral/forestry enterprise size
2.3.2 Average income of small-scale food producers, by sex and indigenous status
7.2.1 Renewable energy share in the total final energy consumption
7.1.2 Proportion of population with primary reliance on clean fuels and technology
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Corporates
Indirectly impacted stakeholders
People
Outcome Risks
Water scarcity
Impact Classification
What
The outcome is likely to be positive, important and intended because investments in solar cooling storage could increase export and the share of renewable energy.
Risk
Increased pressure on scarce water resources.
Impact Thesis
Address food loss and waste issues as well as energy efficiency by investing in solar cold storages.
Enabling Environment
Policy Environment
The government has established various policy and regulatory frameworks to support renewable energy generation, including the renewable energy and energy efficiency law and various strategies (12)
Financial Environment
Fiscal incentives: Tax exemptions for renewable energy systems and equipment from customs duties and sales tax by Renewable Energy and Energy Efficiency law of 2012.
Other incentives: The transfer of revenue and profits, liquidation of the investment, taking out of all capital without capital gains tax, reduced corporate income tax in different regions, transfer of salaries and wages and ownership of up to 50% in some sectors (15).
Regulatory Environment
The country has a favorable legislative framework regarding renewable energy, which includes the energy strategy 2020-2030 (13) and The Renewable Energy and Energy Efficiency Law (REEEL) of 2012 (14).
Marketplace Participants
Government
Jordanian Exporters x& Producers Association (JEPA), Ministry of Agriculture, Ministry of Planning and International Cooperation
Target Locations
Jordan: Countrywide
Jordan: Balqa
Jordan: Madaba
Jordan: Karak
References
- (7) Weather online, retrieved from https://www.weatheronline.co.uk/reports/climate/Jordan.htm Jordan Investment Commission, Energy Sector. Retrieved from: www.jic.gov.jo