The cost to build its new commercial-scale, land-based salmon farm in Pioneer, Ohio, could run as much as 60 percent higher than its initial estimate, genetically modified (GM) salmon producer AquaBounty Technologies said in an update on Tuesday.
The farm, which is projected to produce 10,000 metric tons of farmed salmon, was originally estimated to cost upwards of $200 million (€172 million), according to a company release issued in July.
AquaBounty now expects the 479,000-square-foot facility to cost between $290 million (€250 million) to $320 million (€276 million). The new estimate includes a $30 million (€26 million) reserve for potential cost overruns.
AquaBounty CEO Sylvia Wulf attributed the increased estimate to higher building material and recirculating aquaculture system technology (RAS) costs, as well the inclusion of an on-site processing plant and water treatment facility.
To partially finance the higher costs, the company has begun the process to place a mix of tax-exempt and taxable bonds through the Toledo-Lucas County Port Authority, whose board has approved the issuance of up to $300 million (€260 million) in bonds to support the financing of the project.
Wells Fargo will underwrite and market the bond, which Wulf expects to be completed by the first quarter of next year.
She added that company is on track to begin construction of the Ohio facility by the end of this year, and begin stocking salmon in 2023.
The company had previously identified Mayfield, Kentucky, as the site for its first large-scale production facility. But earlier this year, it said it was reconsidering the locations, saying its "subsequent diligence indicated that an alternative site may be superior."
AquaBounty will also transition its Prince Edward Island, Canada, growout operation to the production of traditional salmon broodstock, eggs and fry, in addition to its GM salmon eggs.
This transition is expected to occur over the next two years and increase egg production capacity from 8 million to 30 million eggs annually to support the egg requirements of the Ohio farm and future farms.
AquaBounty is an early pioneer of land-based salmon farming in the United States. In recent years several companies have either begun or announced plans to build land-based salmon farms in the country.
Nordic Aquafarms is building a facility in Belfast, Maine, that is slated to produce up to 24,000 metric tons annually when fully finished. That project, which is being built in two phases, is estimated to cost a total of $500 million (€442 million).
Atlantic Sapphire, which is striving to become the largest land-based salmon farmer in the United States, said in its most recent prospectus that it expects to incur an estimated $225 million (€194 million) in capital expenditures to finance the second phase of construction at its Miami facility.