Pay-as-you-go cold storage: Businessman wants to expand beyond Nigeria

One of ColdHubs' numerous solar-powered cold rooms across Nigeria.

One of ColdHubs’ numerous solar-powered cold rooms across Nigeria.

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. Since 2017, when How we made it in Africa first interviewed founder Nnaemeka Ikegwuonu, the company has shown substantial growth, more than doubling the number of cold rooms available. Jeanette Clark spoke to Ikegwuonu about his planned regional expansion, diversifying operations and moving away from cash-based transactions.

Providing a solution for food spoilage

ColdHubs was founded in 2015 in Owerri, in Imo State, Nigeria. The main objective was to provide an option for farmers and merchants who lost income as a result of the spoilage of fresh produce due to a lack of cold storage facilities.

Each 3m2 cooling unit can hold three tonnes of food, with customers renting 20kg capacity crates to store their products at the hubs that are available all day, every day.

In 2017, two years after starting operations, the company ran 25 cold hubs in three states of Nigeria with a team of just seven. Today, it has 54 hubs in 22 states, with a total staff of 68. According to Ikegwuonu, it will have an additional 18 hubs switched on before the end of the year, with staff likely increasing to 85.

In 2021, the company reported it had been able to store 50,700 tonnes of food that could, otherwise, have gone to waste. For this year, it hopes to reach 150,000 tonnes.

Regional expansion on the cards

Over the last five years, ColdHubs has benefited from various grants to execute its expansion plans, including funds from USAID, Swiss RE Foundation and the Government of Japan. As part of funding received from GIZ, the German agency for international co-operation, it is now looking to expand to neighbouring Benin.

“We just wrapped up a detailed scoping study of the country and identified the relevant food loss clusters, which are places we will target for the building of cold hubs,” says Ikegwuonu. “We are also talking to the UN Industrial Development Organisation (UNIDO) to support our planned expansion into Sierra Leone.”

These two countries would only be the start. For Ikegwuonu, there are various other countries on the wish list: Mali, Senegal, Côte d’Ivoire, Gambia and Cameroon.

Nnaemeka Ikegwuonu, founder of ColdHubs

Nnaemeka Ikegwuonu, founder of ColdHubs


In the future, ColdHubs wants to position itself for commercial equity and debt funding. To attract this funding, it is diversifying operations. “As much as we have the stationary cold rooms, we recently acquired refrigerated trucks as well. We want to emerge as a Nigerian cold chain company.”

ColdHubs has also increased its production of returnable plastic crates used for the packaging of fresh produce.

Furthermore, to increase the possible client base, the company successfully developed solar-powered phase-change cooling technology suited for the fish and meat value chains. Phase-change materials are cooled when there is sufficient sunshine to power the unit and then, owing to their material properties, keep a steady cool temperature during nightfall or overcast conditions.

“It significantly drops the temperature from above zero degrees Celsius to about minus 15. This is significant in the industry and the sector. We’ve already received a lot of requests from fish retailers and meat abattoirs across Nigeria,” says Ikegwuonu.

These lower temperatures keep products fresh for the long journeys many informal traders undertake to get to the relevant markets.

“We are in discussions with potential investors who are very interested in this technology and the pay-as-you-go storage model we have.”

Solar efficiency and security concerns

ColdHubs’ existing facilities can run for three days without full sunshine. “We’ve never had an experience where we had no sunshine for such a long period. The energy is stored in batteries and also in phase-change materials. With improvement in solar panels over time, even overcast daylight helps to keep it running,” reveals Ikegwuonu.

The business has struggled with damage to the hubs in the past. “In the beginning, we didn’t do a lot of assessments in communities before deployment, and we had cases where batteries, solar panels and even the enclosing structures were vandalised. We have since changed our strategy and we now build them only where there is some level of security.”

ColdHubs currently has 54 facilities in Nigeria.

ColdHubs currently has 54 storage facilities in Nigeria.

The maintenance of the units is digitally managed; every unit sends a digital signal to the central operating team who can determine whether it is functioning. “There are six sensors in each room. We can tell what is happening using a live screen on our mobile phones.”

Routine maintenance is done every three months and a technical team collects data daily on the solar irradiation levels, ambient temperature and even the number of times the doors are opened. “We are using this robust internet-of-things system to pre-empt maintenance,” explains Ikegwuonu.

Moving away from cash

For its unique pay-as-you-go storage service, ColdHubs has predominantly used cash transactions. A customer would pay 200 Nigerian naira (about half a US dollar) to store fresh produce in a 20kg returnable plastic crate, for one day. If they don’t pick it up the next day, they must pay the additional daily rate for the time it was stored.

As the company serves mostly lower-income small-scale farmers and vendors, it has been difficult to introduce any digital form of payment. ColdHubs is working on a unique payment option, which will be launched next year, and hope to see adoption from its existing customer base. “We want to phase out all the cash-based payments, as there are a lot of challenges in managing cash. We have multiple cold rooms in different locations. Unfortunately, such a decentralised system can lead to pilfering,” says Ikegwuonu.

Requests for larger cold rooms

For Ikegwuonu, the most important development has been the interest shown by farmers for larger, 100-tonne solar-powered walk-in cold rooms that can store 5,000 crates.

“By October we will be opening two of these units specifically designed for the farmer aggregation centres. The three-tonne cold rooms we had were just too small for their purpose. These new rooms have automated packing lines and will revolutionise the food supply industry in Nigeria,” he adds.

“We are very excited about it and are planning to roll them out across Africa in future.”

ColdHubs CEO Nnaemeka Ikegwuonu’s contact information

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