Great Northern Salmon 'will begin to build next year'

Great Northern Salmon (GNS) is currently working to raise approximately $20 million to complete the groundwork and detailed design of its planned land-based fish farm on the bed of a drained lagoon in Millinocket, Maine. Only when this is in place can the company go out and raise the major construction financing.

"We are in the process of raising $20m to complete the lagoon and the detailed design work. In the US, we need to do about 90% of the design before we can raise the capital for the actual construction," chief executive Marianne Næss tells LandbasedAQ.

The company is developing a recirculating aquaculture system (RAS) facility with a planned capacity of 8,900 tonnes of Atlantic salmon per year, more than the 7,500 tonnes ballpark figure previously given by GNS.

Design before construction

According to Næss, project development works differently in the US than in Norway, where a plethora of land-based farms are being built.

The engineering work for a facility can typically account for 5–10% of the total investment costs, depending on the complexity. At the same time, US projects often use fixed-price contracts.

"In practice, you have to have almost the entire design ready before you get the construction loan. You get a construction manager who guarantees a fixed price, but to do that, the project must be fully designed."

This means that much of the work that in Norway often takes place in parallel with the financing must be done in advance in the United States.

"If we were in Norway, we could have started raising capital for the construction earlier. In the US, it costs more up front, but it also takes out a lot of risk because you get a fixed price for the work," explains Næss.

Planning a capital round

GNS has already completed much of the groundwork on the site in Maine, including dredging the lagoon where the facility will be built.

Once the design work is complete, the company plans to raise the large construction capital.

"Once we are done with this phase, we will launch the large capital round towards the end of the year and into the first quarter. The goal is to get the buildings up and running and start installations next year."

Good arrangements

Despite increased geopolitical unrest and discussions about tariffs and trade, the company is experiencing good interest from investors.

"The foundation for investments in the US is very solid and not very affected by the daily political situation," says Næss.

The company is now seeking strategic capital, including from Norwegian industry, to verify the project.

"That type of industrial expertise is less available in the US. But once the project is verified, there is a lot of project capital over there."

Among the financing options are so-called "muni bonds" – tax-free bonds that are often used for major infrastructure projects – as well as various government incentive schemes.

The facility is planned in an area that is considered a so-called "depressed community", where many jobs in traditional industry have been closed, and where there are several programmes to stimulate new ventures. The lagoon drained for the salmon farm, for example, was part of a now-disappeared paper mill.

"There are many good financing schemes in the US. In the next round, we will also focus more on infrastructure investors," says the GNS CEO, a Norwegian who was attending the North Atlantic Seafood Forum in Bergen.

Large market for local salmon

Næss also believes that the market in the US is large enough for both imported and locally produced salmon.

"There is actually an undersupply in the market. We will produce a high-quality product locally and have stable energy costs since we use 100% hydropower."

GNS has also established distribution channels towards retail segments that are less price sensitive and emphasise other things.

"In those segments, factors such as local production and sustainability are important, and there we can position our product well in the market," says Næss.