Banks will be less willing to lend after salmon tax kicks in, says investment exec

"When offering loans, we look at customers' ability to service them," said Per Martin Olsen. 'This means net cash flow. And with a 35 percent resource rent tax, businesses will have less to work with. The consequence may be that banks will no longer be as willing to lend as before."

Olsen added that lower cash flow for companies will make it less attractive for investors to enter the industry.

"We are concerned that the value creation potential in aquaculture is reduced due to less capital access," he said.

With about 80 percent of investments in the industry outside the areas proposed as subject to the salmon tax, the ripples will be felt quite broadly, according to the banking exec.

"We are talking about major investments in hatcheries, harvest facilities, further processing, large and small vessels, and more. These investments are made with capital from the fish farming part," he said.

"We are afraid of the consequences of the salmon tax. Yes, the fish farmers themselves will probably manage well, but I am especially concerned about the suppliers," said Olsen.

The views of the Sparebank 1 executive are echoed in DNB Bank's response to the Norwegian Ministry of Finance's consultation on the tax.

DNB is the world's largest seafood bank with loans, guarantees and credits worth more than more than $7 billion (€6 billion) invested across the world.

In the consultation response, Anne Hvistendahl, who leads the investment firm's global seafood initiative, argued that banks' lending capacity to aquaculture will decrease as consequence of the tax.

"As a global player, we see that for investments with long repayment times, it is essential that framework conditions are stable and predictable," she wrote.

This will be the result of businesses' weakened ability to service debt due to reduced cash flow.

She is also concerned about the ripple effects of the salmon tax and said the proposal will reduce access to capital across the broader industry.

"A weakened supplier industry could thus weaken growth and future value creation opportunities," she wrote.

SpareBank 1 is a Norwegian alliance of independent savings banks that cooperate on various aspects of their operations. The alliance was established in 1996 and currently consists of several savings banks, which together offer a wide range of financial products and services to individuals, businesses, and the public sector in Norway.

Per Martin Olsen is in charge of ocean industries at the bank and also has a background in the aquaculture industry.

For seven years he worked for salmon producer Follalaks, which was later acquired by Mainstream Norge, where he was the CEO.

Today, Mainstream Norge has become Cermaq Norway.