In many sub-Saharan African countries, cold chain infrastructure is underdeveloped, and in some places even non-existent, according to Damilola Agbaje, director of African Infrastructure Investment Managers (AIIM). The United Nations’ Food and Agriculture Organisation estimates over 40% of food in sub-Saharan Africa perishes before it reaches a consumer. This can be as high as 60% for fresh produce, pointing to unmet demand for temperature-controlled cold-storage warehouses and transportation services.

Tapping into this opportunity, AIIM, together with other investment partners, recently established Commercial Cold Holdings, which it plans to grow into a pan-African cold chain logistics platform. Agbaje says temperature-controlled logistics infrastructure is important to improve food security in the region and enable domestic food producers to meet the standards required to participate in global trade. He added that high population growth rates and rapid urbanisation have increased pressure on the continent’s temperature-controlled storage infrastructure.

AIIM has earmarked US$150 million for investments in Commercial Cold Holdings, which in turn will acquire existing cold chain businesses and start greenfield projects with strategic physical locations and/or integration with market-leading food producers, wholesalers and retailers. It aims to build out a network of temperature-controlled warehouses in key demand hubs and food production regions on the continent. The platform this week announced its acquisition of South Africa’s CCS Logistics, which operates cold storage facilities in Johannesburg, Cape Town and Walvis Bay, Namibia.

AIIM’s research shows that despite South Africa’s relatively advanced cold chain infrastructure, it still lags comparable countries: South Africa has 13m³ of cold storage per 1,000 residents, compared to 105m³ and 83m³ in Egypt and Brazil, respectively.

Recent years have seen a growing number of African entrepreneurs and investors introducing cold chain solutions:

• Koolboks, founded in 2018, provides small businesses in Nigeria and beyond with cold storage solutions. It has developed an off-grid solar-powered unit that works as a refrigerator or freezer, which can stay cool for up to four days without power and sunlight. The units also come with two LED lighting bulbs and USB ports for charging mobile phones. Koolboks has integrated pay-as-you-go technology, which makes the units more affordable. The business recently closed a $2.5 million seed funding round, led by Aruwa Capital Management, bringing its total investment to date to $3.5 million. Read more: Nigerian entrepreneur sees opportunity in off-grid freezers

• ColdHubs is a Nigerian company that operates solar-powered cold rooms, providing a pay-as-you-store service for fresh produce to smallholder farmers and market merchants. Each 3m² cooling unit can hold three tonnes of food. A customer pays 200 Nigerian naira (about half a US dollar) to store fresh produce in a 20kg returnable plastic crate, for one day. Today the company, founded in 2015, has 54 hubs in 22 states, with a total staff of 68. Read more: Pay-as-you-go cold storage – Businessman wants to expand beyond Nigeria

• Cold Solutions Kenya, a portfolio company of private equity vehicle ARCH Cold Chain Solutions East Africa Fund, in 2020 announced it will invest KSh 7.5 billion ($62 million) to construct state-of-the-art, temperature-controlled warehouses in Nairobi and Mombasa. The company’s flagship facility in the Tatu City Special Economic Zone in Nairobi and has been designed to cater for numerous temperature ranges from +26°C to -40°C across multiple product ranges, from fresh fruit and vegetables, pharmaceuticals and vaccines to meats, poultry and frozen foods.

• InspiraFarms designs and supplies cold-storage solutions for fresh produce companies in Africa. It has a wide variety of clients, from small-scale farmer groups to large agricultural enterprises. InspiraFarms has developed prefabricated, modular cold-storage technology. The units are portable and can easily be removed or relocated. They are also relatively easy to install in rural areas. To make this more affordable, InspiraFarms presents its clients with a variety of financing options.