Salmon Evolution plans 48 tanks that will enable it to produce 31,500 gwt of salmon annually, and has already produced salmon from phase 1.

Salmon Evolution secures £121m loan

Credit facility with Scandinavian banks refinances debt and provides two thirds of capex for phase 2 of land-based fish farm


Land-based fish farmer Salmon Evolution today announced an agreement with DNB and Nordea banks for a green debt financing package totalling NOK 1.55 billion (£121 million) relating to the first two phases of its planned 31,500-tonnes-per-year facility at Indre Harøy (Harøy Island), Norway.

The loan package has three elements:

  • NOK 525 m to refinance Salmon Evolution’s existing NOK 525 m construction loan relating to phase 1 (the "Term Loan")
  • NOK 250 m RCF (revolving credit facility) capital expenditure facility available for general corporate purposes including Indre Harøy phase 2 capex (the "RCF Facility")
  • NOK 775 million construction facility available for financing of capex relating to phase 2 at Indre Harøy (the "Construction Facility")

Strong interest from banks

Salmon Evolution, which completed the harvest of its first batch of fish in phase 1 towards the end of 2022, said the new debt financing package is the result of a thorough process with strong interest from a number of leading banks following the company’s strong operational development over the last year.

The deal will have several positive effects for the company:

  • Improved cash flow following the refinancing of the company's existing construction loan into a non-amortising term loan
  • Significantly lower margin
  • Significant financial flexibility to finance early phase 2 capex at IndreHarøy

All facilities have a 3-year term with 2x1 year extension options. The debt financing package allows for an increase of the company’s existing overdraft facility related to working capital financing from current NOK 100 m to NOK 300 m.

NOK 1.6 bn for phase 2

Indre Harøy phase 2 capex is currently estimated to NOK 1.6 – 1.7 bn with the new RCF Facility and Construction Facility representing a total financing of NOK 1.025 bn, implying an incremental loan to value of around 60-65%. The remaining capital requirements are planned to be financed by cash at hand, operational cash flow, equity or other sources.

The company said it has not taken any material investment decision or entered into any definitive construction agreement as to Indre Harøy phase 2 and maintains full flexibility both as to timing and spending. Furthermore, upon a potential investment decision, the company currently expects moderate investments the first 6-9 months of the project.

The RCF Facility will be fully available upon closing which is expected during April 2023 providing the company with significant flexibility to finance early phase 2 capex. Utilisation of the Construction Facility is subject to customary conditions, including sufficient new equity demonstrating that phase 2 is fully financed as approved by the lenders.

Steady state from late Q3

Salmon Evolution repeated its statement from its Q4 2022 report that it is on track for profitable farming operations in Q2 2023 and steady state production from late Q3 2023.

In November last year Salmon Evolution reported that all buildings and structural facilities had been completed for phase 1, which will have an annual production capacity of 7,900 gutted weight tonnes of Atlantic salmon.

Phase 2 will add a further 7,900 gwt, and a third phase will add a further 15,700 gwt.