Cold Solutions Rwanda gets $18m to expand cold storage in Kigali

Cold Solutions Rwanda has secured up to $18 million to build a new cold storage facility in Kigali, giving food and other temperature sensitive businesses more space to store products. The financing comes from the Africa Go Green Fund, managed by Cygnum Capital. The facility will be built in Kigali's Prime Economic Zone and will initially have capacity for about 4,000 pallets. That can later be increased to 8,000 pallets.

Cold Solutions Rwanda will offer storage, packing, handling and refrigerated transport from the site. The company already runs a temperature-controlled packhouse in Kigali and has an avocado processing line that works with local farmers preparing produce for export. The new facility adds another part to that operation.

Why cold storage matters to food businesses

For a company dealing in fresh produce, the sale does not end when the farmer delivers the crop. The produce may still need to be sorted, packed and stored before it is transported to a buyer or an export market. Without suitable refrigeration, there is less time to do that. A business may have to move stock immediately or accept that some of it will lose quality.

That is particularly difficult for smaller companies that cannot afford to build their own cold rooms. Cold Solutions Rwanda's model is to provide the storage as a service. A business can use space in the facility without having to own the building or refrigeration equipment. The new site is also expected to provide temperature-controlled storage for pharmaceutical products.

The cost of keeping things cold

Cold storage is not simply a matter of putting products inside a large refrigerated room. The equipment has to operate continuously, which makes electricity an important part of the cost of running the facility. The Kigali project will include a planned 440kW rooftop solar installation. The company also plans to pursue green-building certification.

The $18 million financing will cover construction and working capital. Because the funding is structured as debt, the facility will ultimately have to generate enough business to support its operating costs and financing. That will depend on demand from food companies, exporters, distributors and other businesses that need temperature-controlled storage.

Part of a regional business

Cold Solutions Rwanda is part of the ARCH Cold Chain Solutions East Africa Fund, which is developing cold storage facilities in the region. The fund has also backed a cold chain facility in Kenya. The idea is to build infrastructure that businesses can use without each company having to invest in its own warehouse. For Rwanda, the Kigali facility gives companies another place to keep products between production and sale.

That could be useful for exporters waiting for shipments, food processors holding raw materials or distributors managing stock. But the facility still needs customers. Its success will depend less on the size of the warehouse than on whether enough businesses are willing to pay to use it.