Cold Storage Infrastructure
Cold Storage Infrastructure
Business Model Description
Build cost-effective and solar-powered cold warehousing facilities with high infrastructure connectivity, such as the ones established adjacent to the seaport and the international airport, to store processed frozen food at minus 20 or minus 40 degrees Celsius, including fish and other seafood products that will be either exported, re-exported, or are imported for use in the domestic market. Work with a firm customer base from fish processors, especially in the tuna industry, and artisanal fishers or smallholders to big agricultural and livestock producers, eliminating the risk of cross-contamination.
Expected Impact
Enhance processors' and small-scale producers' access to capital-intensive market infrastructure, increasing value added from key sectors.
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
- Seychelles: Greater Victoria
- Seychelles: Rural Mahé
- Seychelles: Praslin
- Seychelles: La Digue
- Seychelles: Outer Islands
Sector Classification
Infrastructure
Development need
Seychelles' critical infrastructure, located along the narrow coastal area and reclaimed land, is exposed to adverse effects of climate change, notably sea level rise and storm surges. In addition, agriculture and fishing activities require an efficient market infrastructure system and improvements in port and warehousing services, water management processes, and waste circularity (1, 2, 3).
Policy priority
Seychelles National Development Strategy (NDS), 2019-2023 devises strategies for the infrastructure sector to achieve the goal of sustainable socioeconomic transformation and SDG 9. The government is considering removing obstacles to implementing and financing infrastructure projects through Seychelles Infrastructure Agency, created in 2022, and public-private partnership (PPP) (6, 7).
Gender inequalities and marginalization issues
La Digue, the third most-populated island in Seychelles, is particularly vulnerable to power cuts as it is connected to the grid through Praslin. In addition, a moratorium on the construction of new tourism accommodations came into force due to deficient infrastructure, including utilities and waste management (8).
Investment opportunities Introduction
Seychelles' strategical location in the western Indian Ocean, untapped ocean resources and service-based economy promise high impact in projects aimed at waste-to-energy plants, circular waste management in hotels, district sports infrastructure, water infrastructure for drainage and distribution, sewerage, and storage infrastructure such as silos (5, 10).
Key bottlenecks Introduction
Small population size and low industrial activity limit the scalability of projects. Limited land space, mountainous terrain and climatic risks, including inundation and landslides, accentuate operational concerns. State-owned enterprises may crowd out private infrastructure investments. The finance cost is high, with the commercial prime lending rate around 9.5% (5, 11).
Infrastructure
Development need
Seychelles, a geospatially isolated biodiversity hotspot with limited and mountainous land, serves a strong fishing industry and more than three times its own tourist population. Infrastructure is ageing or inadequate in energy, and sanitation, to solve road and port congestion and treat solid waste and wastewater with a very low centralized sewerage coverage of 15% (4, 5).
Policy priority
Infrastructure services in the fisheries sector is endorsed through the "Promote Added Value and the Modernization of Infrastructure" strategy, cold chain and sewage infrastructure development in Ile du Port, institutional support by Seychelles Fishing Authority (SFA), and the Agreement for Sustainable Fishing Partnership between Seychelles and the European Union for project finance (7).
Gender inequalities and marginalization issues
On the main outside island of Mahé, particularly in La Digue, where land is more scarce than the two more populated inner islands, centralized sewerage and sanitation facilities are lacking, and collection and disposal of waste are deficient, impeding the growth of fisheries and tourism value chains (3). Infrastructure in Outer Islands might be exposed to a higher risk of extreme and adverse weather events than other regions, as experienced when Cyclone Bondo impacted the Providence and Farquhar islands in 2006 (9).
Investment opportunities introduction
Seychelles' vast Exclusive Economic Zone (EEZ), government support to Blue Economy, and development of a Fish Processing Zone (FPZ) on Ile du Port, assist public-private partnerships (PPP) and private investments in the modernization of port and airport infrastructure to improve landing, handling and storage of local produce, notably fish, and resources (10).
Key bottlenecks introduction
The cost of utilities and electricity is high. Skills supply to operate facilities are limited as the foreign workforce is needed for sorting fish and bycatch in cold storage facilities. Lack of data impedes evidence-based decision-making, for instance, in port services. Operability depends on imported goods, such as bins used for cold storage (5, 12).
Engineering and Construction Services
Pipeline Opportunity
Cold Storage Infrastructure
Build cost-effective and solar-powered cold warehousing facilities with high infrastructure connectivity, such as the ones established adjacent to the seaport and the international airport, to store processed frozen food at minus 20 or minus 40 degrees Celsius, including fish and other seafood products that will be either exported, re-exported, or are imported for use in the domestic market. Work with a firm customer base from fish processors, especially in the tuna industry, and artisanal fishers or smallholders to big agricultural and livestock producers, eliminating the risk of cross-contamination.
Business Case
Market Size and Environment
USD 100 million - USD 1 billion
Seychelles is a major transhipment hub in the Western Indian Ocean (WIO). More than 340,000 MT of fish and an estimated 14,000 MT of bycatch pass annually based on 2017 and 2018 data, respectively (15). However, limited local value addition, partly due to a lack of adequate infrastructure, is observed as only 60,000 MT are used within the local market, either for consumption or processing (17).
The fisheries sector accounts for an estimated 90% of total annual domestic export revenues for Seychelles and exported fish products worth more than SCR4.5 billion (USD 340M) annually (16).
Indicative Return
> 25%
Cold storage facilities set up in a port area in Seychelles have a payback period of eight years (12).
Investment Timeframe
Medium Term (5–10 years)
Cold storage facilities set up in a port area in Seychelles have a payback period of eight years (12).
Ticket Size
> USD 10 million
Market Risks & Scale Obstacles
Capital - CapEx Intensive
Business - Supply Chain Constraints
Impact Case
Sustainable Development Need
Fish prices and capture are seasonal depending on the Moonsons. Therefore, food security is tied to sustainable capture and price stability in Seychelles, among the world's highest per capita fish-consuming countries with 58.9 kg (15, 20).
Exports and processing operations in the fisheries sector are constrained by inadequate cold storage capacity, thereby limiting and risking the value added from the fisheries value chain, contributing to 9-11% of the GDP and more than 90% of exports (19, 29, 32).
Increasing sustainability of the fisheries sector, specifically for the tuna value chain, including industrial fishing and processing, is under scrutiny on practices such as compliance with quotas and European Union (EU) regulation that necessitates bringing bycatch to land (14).
Gender & Marginalisation
Artisanal fisheries face high variance in annual fish catch, which is critical for their food security, livelihoods and Seychellois cultural identity (15, 20).
Expected Development Outcome
Cold storage facilities make buffer stocks possible, sustaining price and supply stability (15).
Cold chain infrastructure services increase value addition from the fisheries sector, specifically by sorting and sizing activity carried out in the cold rooms.
Infrastructure for the fisheries sector, such as cold storage, improves bycatch and waste management, traceability of products and market access for small-scale producers.
Gender & Marginalisation
Cold storage facilities open new markets for artisanal fishers, such as selling fresh produce, improving their livelihoods and means of sustainable income generation (20).
Primary SDGs addressed
2.1.2 Prevalence of moderate or severe food insecurity in the population, based on the Food Insecurity Experience Scale (FIES)
9% in 2017 (3).
Eradication of food insecurity by 2030 (3).
8.1.1 Annual growth rate of real GDP per capita
4% in 2019 (3).
Real GDP Growth: 4% in 2023 (6).
14.4.1 Proportion of fish stocks within biologically sustainable levels
21% in 2019 (3).
Restoring the status of declining fish stocks in the shortest time (3).
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Planet
Corporates
Public sector
Indirectly impacted stakeholders
Gender inequality and/or marginalization
Planet
Corporates
Public sector
Outcome Risks
Construction of cold storage facilities, specifically on reclaimed land, may aggravate pressure on Seychelles' environment.
The operation of cold storage facilities posits unique risks to employees' health, such as accidental exposure to extreme cold and ammonia (21).
Reliance on foreign labour for operations of the cold storage facility may exacerbate existing inequalities in society.
Impact Risks
The use of cold storage facilities, especially if not powered by renewable resources, might be unaffordable for those in need, including artisanal fishers.
Impact Classification
What
Cold chain infrastructure development improves food security and access to markets and raw materials, helping Seychelles with untapped opportunities in Blue Economy and maritime trade.
Who
Small-scale producers, notably artisanal fishers, visitors in Seychelles and industry benefit from storage and logistics.
Risk
High cost of electricity and land scarcity context may increase prices, jeopardizing affordability by artisanal fishers or smallholders.
Contribution
Seychelles' value-added export potential is increased, which is otherwise achievable, at scale, by increasing service exports, for instance, by increasing per capita tourist expenditure.
How Much
Cold storage infrastructure increases value addition in Seychelles, whereby currently more than 75% of the fish landed don’t receive any, and extends artisanal fishery value chains.
Impact Thesis
Enhance processors' and small-scale producers' access to capital-intensive market infrastructure, increasing value added from key sectors.
Enabling Environment
Policy Environment
Seychelles Fisheries Sector Policy and Strategy, 2019: set ten policy priorities for Seychelles’ fisheries sector, including one on infrastructure support and value chain development, referring to onshore services, including storage (23).
Greenhouse Gas Inventory & Mitigation Strategies for the Refrigeration and Air Conditioning Sector in the Seychelles, 2020: analyzes equipment-based results and technology gaps in the industrial refrigeration subsector, including cold stores, and outlines the National Cooling Strategy (NCS) (24).
Seychelles Blue Economy: Strategic Policy Framework and Roadmap Charting the future 2018-2030: Seychelles' blue economy roadmap considers strategic opportunities in developing fish value chains and seafood traceability with cold storage facilities (25).
Seychelles Fishing Authority Strategic Plan 2018-2020: aiming at transforming Victoria from a major tuna transhipment hub to a primary seafood processing centre of the Indian Ocean, accentuating the need for developing cold storage capacity (26).
The Promotion of Value Addition and the Modernization of Infrastructure Strategy: part of the national economic transformation strategy, highlighted during the 2022 Budget Speech, emphasizes value addition from fisheries and industrial fishing projects in zone 14, which includes cold store (7).
Reserved Economic Activities Policy, April 2020: ensures that certain economic activities that are doable and affordable to the Seychellois investors and businesses shall remain reserved for them; the list includes artisanal fishing, including demersal fishing (33).
Financial Environment
Financial incentives: Blue Investment Fund (BIF) loan scheme offers up to US$ 3 million at a 4% interest rate. Blue Grant Fund (BGF) offers grants to impactful sustainable fisheries projects, Fisheries Development Fund - up to €500,000 at a 3% interest rate, maximum 12 years repayment.
Other incentives: The government allocated a land area covering 70,000 square meters for private investors in Fish Processing Zone at Ile Du Port, specifically to support land-based services for fisheries (31).
Regulatory Environment
Seychelles Infrastructure Agency Act, 2021: establishes and sets out the functions of the Seychelles Infrastructure Agency, which provides technical consultancy for engineering and construction services to government ministries (27).
Seychelles Fisheries Act, 2014: forms the legal basis for developing and managing fisheries, including clauses on storing fish products (23).
Food Act, 2014: makes provisions for food safety in Seychelles, considering food storage (28).
Seychelles Investment Act, 2010: broadly defines investment and investor’s nationality - based on citizenship or the level of control- and makes all foreign investments subject to screening by the Seychelles Investment Board (SIB), giving the latter a business facilitation role (29, 30).
S.I. 76. - Seychelles Investment (Economic Activities) Regulations, 2022: lists storage and warehouse services and general construction work for building class one as an activity a non-Seychellois may invest in with the requirement to conduct an Economic Needs Test (ENT) (34).
Marketplace Participants
Private Sector
Central Common Cold Store (CCCS), Indian Ocean Tuna (IOT), Oceana Fisheries, Fishtech, Amirante Fisheries, Geffroy's Farm, L'Union Estate, GIBB Seychelles.
Government
Blue Economy-driven initiatives obtain public support at all levels. Ministry of Fisheries and Blue Economy, Seychelles Fishing Authority (SFA), Seychelles Investment Board (SIB), Seychelles Port Authority, The Seychelles Conservation and Climate Adaptation Trust (SeyCCAT).
Multilaterals
The African Development Bank (AfDB), United Nations Development Programme (UNDP), Commonwealth of Nations, Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ).
Non-Profit
Seychelles Fishermen and Boat Owners Association (SFBOA), the Seychelles Chamber of Commerce and Industry (SCCI).
Target Locations
Seychelles: Greater Victoria
Seychelles: Rural Mahé
Seychelles: Praslin
Seychelles: La Digue
Seychelles: Outer Islands
References
- (1) Republic of Seychelles Climate Change and Energy Department of the Ministry of Agriculture, Climate Change and Environment. 2021. Seychelles’ Updated Nationally Determined Contribution. https://www4.unfccc.int/sites/ndcstaging/PublishedDocuments/Seychelles%20First/Seychelles%20-%20NDC_Jul30th%202021%20_Final.pdf
- (2) Xie, Daniel; Rice, Harold; Rolf, Brett; Rumschlag, Jacob. 2019. Evaluating the Impacts of Sea Level Rise and Storm Surges on Seychelles' Critical Infrastructure. https://deepblue.lib.umich.edu/bitstream/handle/2027.42/148836/Evaluating%20the%20Impacts%20of%20Sea%20Level%20Rise%20and%20Storm%20Surges%20on%20Seychelles%27%20Critical%20Infrastructure_047.pdf?sequence=1&isAllowed=y
- (3) Republic of Seychelles Ministry of Finance, Trade, Investment & Economic Planning, Economic Planning Department. 2020. Voluntary National Review 2020. https://sustainabledevelopment.un.org/content/documents/26382VNR_2020_Seychelles_Report.pdf
- (4) Ministry of Environment, Energy and Climate Change. 2018. Seychelles National Waste Policy 2018-2023. http://www.meecc.gov.sc/index.php/what-we-do/waste-management/
- (5) World Bank. 2017. The Republic of Seychelles Systematic Country Diagnostic. Washington, DC: World Bank. https://openknowledge.worldbank.org/handle/10986/27559
- (6) Ministry of Finance, Trade, Investment and Economic Planning. 2019. Seychelles National Development Strategy 2019-2023. http://www.finance.gov.sc/uploads/files/Seychelles_National_Development_Strategy_2019_2023_new.pdf
- (7) Ministry of Finance, National Planning and Trade. 2021. Budget 2022 Speech delivered by Naadir Hassan, Minister for Finance, Economic Planning and Trade. https://www.statehouse.gov.sc/uploads/cabinet_downloads/126_SXUXuA3m.pdf
- (8)Gappy, Vidya. 2021. Carrying capacity studies on La Digue. Seychelles Nation. https://www.nation.sc/articles/9897/carrying-capacity-studies-on-la-digue
- (9) United Nations Development Programme. 2008. Disaster Risk Profile of the Republic of Seychelles. https://www.preventionweb.net/files/18276_18276disasterriskprofileofseychelle.pdf
- (10) Seychelles Chamber of Commerce and Industry (SCCI). 2021. A National Public Private Partnership for Building a Better Seychelles: The SCCI Response to the Budget Speech of Minister Naadir Hassan.
- (11) UNDP Project Team stakeholder colsultation undertaken with a commercial bank in May 2022.
- (12) UNDP Project Team stakeholder colsultation undertaken with a Seychellois firm operating a cold store facility in July 2022.
- (13) Karapetyan, Salifa. 2021. Massive new freezer gives Seychelles a bigger foothold in the fish industry. Seychelles News Agency: Victoria. http://www.seychellesnewsagency.com/articles/15947/Massive+new+freezer+gives+Seychelles+a+bigger+foothold+in+the+fish+industry#:~:text=Located%20on%20Ile%20du%20Port,accordance%20with%20client%20specific%20requirements
- (14) UNDP Project Team stakeholder consultation undertaken with a private sector agency in fisheries sector in May 2022.
- (15) The Ministry of Fisheries and Agriculture. 2019. Fisheries Comprehensive Plan. https://echebastar.com/wp-content/uploads/2019/11/Seychelles-Fisheries-Comprehensive-Plan-Nov-2019.pdf
- (16) National Bureau of Statistics. 2021. Seychelles in Figures 2021 Edition. https://www.nbs.gov.sc/downloads/other-publications/annual-publications/seychelles-in-figures-2021-edition
- (17) Stop Illegal Fishing. 2020. Moving Tuna: Transhipment in the Western Indian Ocean. Gaborone, Botswana. https://stopillegalfishing.com/wp-content/uploads/2020/09/Moving-Tuna-FINAL-WEB2.pdf
- (18) Corporate and Business Registration Department. 2022. Search by File No.: C6620. Information about Froid Des Mascareignes Ltd. https://onlinesearch.mns.mu/
- (19) Government of the Republic of Seychelles & The United Nations. 2018. Strategic Partnership Framework (SPF) 2019-2023. https://minio.dev.devqube.io/uninfo-production-main/31577005-0d19-4fd6-bd85-5f76a035a082_SPF_Seychelles.pdf
- (20) Ahmed, F., Houessenou, P., Nikiema A. & Zougmore, R. 2021. Transforming agriculture in Africa's Small Island Developing States. Accra. FAO. http://doi.org/10.4060/cb7582en
- (21) United Kingdom, Health and Safety Executive. Example risk assessment for cold storage warehousing. https://www.hse.gov.uk/risk/casestudies/pdf/coldstorage.pdf
- (22) Karapetyan, Salifa. 2022. Solar power planned for one of world's largest tuna canneries based in Seychelles. Seychelles News Agency: Victoria. http://www.seychellesnewsagency.com/articles/16182/Solar+power+planned+for+one+of+world%27s+largest+tuna+canneries+based+in+Seychelles
- (23) The Government of Seychelles. 2019. Seychelles Fisheries Sector Policy and Strategy. http://www.mofbe.gov.sc/wp-content/uploads/Seychelles-Fisheries-Sector-Policy-.pdf
- (24) Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH. 2020. Greenhouse Gas Inventory & Mitigation Strategies for the Refrigeration and Air Conditioning Sector in the Seychelles. Victoria, Seychelles. https://www.green-cooling-initiative.org/fileadmin/user_upload/RAC-Inventory-SEY-20201217-web-alternative.pdf
- (25) Republic of Seychelles. 2018. Seychelles Blue Economy: Strategic Policy Framework and Roadmap Charting the future (2018-2030). https://investinseychelles.com/component/edocman/blue-economy-road-map/download?Itemid=0
- (26) Seychelles Fishing Authority (SFA). 2018. Seychelles Fishing Authority Strategic Plan 2018-2020. https://aquadocs.org/bitstream/handle/1834/14808/SFA%20Strategic%20Plan%202018%20-%202020.pdf?sequence=1&isAllowed=y
- (27) Republic of Seychelles. 2021. Seychelles Infrastructure Agency Act. https://www.gazette.sc/sites/default/files/2021-12/Act%2056%20-%20Seychelles%20Infrastructure%20Agency%20Act%202021.pdf
- (28) Republic of Seychelles. 2014. Food Act. http://extwprlegs1.fao.org/docs/pdf/sey143993.pdf
- (29) The United Nations Conference on Trade and Development (UNCTAD). 2020. Investment Policy Review of Seychelles. United Nations, Geneva. https://unctad.org/system/files/official-document/diaepcb2020d1_en_0.pdf
- (30) Republic of Seychelles. 2010. Seychelles Investment Act. http://www.mofbe.gov.sc/wp-content/uploads/2021/09/Seychelles-Investment-Act-2010.pdf
- (31) Seychelles Port Authority. 2022. Facilities: Zone 14. http://www.seyport.sc/index.php/facilities/zone-14
- (32) UNCTAD. 2017. A Piece of the Fish Pie: Sharing the Benefits of Fisheries with LDCs and SIDS. https://unctad.org/fr/node/1575
- (33) The Ministry of Finance, Trade, Investment and Economic Planning. 2020. Policy Paper on Economic Activities Reserved for Seychellois. https://www.investinseychelles.com/component/edocman/reserved-economic-activities-policy-reap-_april-2020/download?Itemid=0
- (34) Ministry of Investment, Entrepreneurship, and Industry. 2022. Seychelles Investment (Economic Activities) Regulations, 2022. https://www.gazette.sc/sites/default/files/2022-07/SI%2076%202022%20-%20Seychelles%20Investment%20%28Economic%20Activities%29%20Regulations%202022.pdf