Minas Gerais, Brazil is promoting investment in biodiesel production due to its ideal conditions. It has vast arable land, including land unsuitable for food crops that is well-suited for oilseed crops. The state government supports biodiesel production through research funding, incentivizing private sector involvement, and goals such as producing enough biodiesel to blend 2% by 2007 and 5% by 2013. Minas Gerais aims to generate income for 100,000 families by 2007 through its biodiesel program.

1. MINAS GERAIS:
YOUR IDEAL LOCATION IN BRAZIL

2. features of envisaged area
Total semi-arid area: 1.219.021,50
Km2, equivalent to about 1/5 of Brazil
– comprising ten States Maranhão,
Piauí, Ceará, Rio Grande do Norte,
Paraíba, Pernambuco, Alagoas, Sergipe
e Bahia and Minas Gerais. Population:
1/3 of Brazil (55 million)

3. the social energy biosphere

4. the rationale
When the National Program of Biodiesel Production and Use (PNPB) was started, on
December 2004, the Brazilian Government relied on the growing demand for fuels
from renewable sources and on the Brazilian potential to meet a substantial part of
these needs, thus generating jobs and income in rural areas, reducing regional
inequalities and contributing to foreign-exchange savings and to the improvement of
environmental conditions.
There is widespread consensus among energy specialists as to the fact that the
Twenty-first Century will be the age of agroenergy.
Energy security must be achieved through the increasing production of fuels from
renewable sources and this achievement requires compliance with the requirements
of sustainability in the broad sense : environmental, economic, social and
technological sustainability.
Brazil has very favorable land and climate conditions and has a great potential for the
production of biomass. The addition of value to agricultural activities represents a
major comparative advantage to Brazil. Biodiesel is one of these possibilities,
perhaps the most promising one, as the demand for energy will increase as the world
economy keeps growing.
In this context, the Government has foreseen the possibility – which is actually taking
place – of engaging small farmers and producers of the Brazilian poorest regions in
the biodiesel value chain. This is being achieved by means of tax incentives granted
to firms that purchase oil-producing crops grown by small farmers. With the purpose
of creating market for biodiesel, a law that requires the addition of biodiesel into
diesel (2% in 2008, and 5% in 2013) was sanctioned.

5. Brazil: a global benchmark in RET
Brazil has ideal conditions for becoming a major world producer of
biodiesel. It has a vast amount of arable land, part of which is not
suitable for food crops but has the right soil and climate for
growing a range of oilseeds.
Biodiesel will make Brazil a global benchmark in the use of
renewable fuels.It first won this position in the 1970s with the
introduction of ethanol made from sugarcane to power automotive
vehicles.
The National Alcohol Program, Proálcool, was the largest fossil
fuel substitution program in the world automotive market. It is
still considered a global example of excellence, and Brazil remains
the largest producer and consumer of fuel alcohol in the world.
The experience Brazil has accumulated through the Proálcool
serves as a strong foundation for implementing the biodiesel
program and maximizing the nation’s competitiveness in a
relatively short period.

6. Brazilian National Plan for Biodiesel
The National Program
for use and production
of Biodiesel (PNPB) is
a Federal Inter-
ministerial program
with an aim at
implementing a
sustained
development ,
technically and
economically. The
emphasis lies on social
inclusion and
employment/wealth
generation and
regional development

7. Brazilian energy matrix

8. “Minas Gerais State
is getting ready to become the best State in Brazil
To live and invest.”
“ECONOMIC DEVEVELOPMENT SECRETARIAT OF MINAS GERAIS
BRAZIL AND MINAS GERAIS STATE:
THE BEST PLACE FOR INVESTMENT IN BIO-DIESEL PRODUCTION

9. MINAS GERAIS STATE:
The ideal place for investments in Brazil
Strategically located in the Southeast region of
Brazil: concentrating 78% of Brazilian consuming
market .
18 million people.
Territory greater than many European countries.
Third largest South American economy.
Excellent infra-structure
Abundant energy and modern communication.
Modern law on on Public-private partnerships,
respecting obligations with investors and partners.
Expedient and practical action from Public
Administration
Strong competitiveness for new enterprises
Highly qualified labor
MINAS GERAIS State stands at a vibrant moment in its development,
introducing entrepreneurial changes, innovation, paradigm shifts, and
openness for new alternatives and investments.

10. The State governments is enacting consistent, long-range, and coordinated policies that
are informed by broad stakeholder participation. Policy priorities in Minas Gerais State
include:
Strengthen the Market: creating an enabling environment based on sound fiscal policy
and support for private investment, infrastructure development and the building of
transportation fleets that are able to use the new fuels.
Speed the Transition to Next-Generation Technologies: expediting the transition to
the next generation of feedstock and technologies that will enable increased
production at lower cost, while reducing negative environmental impacts.
Protect the Resource Base. Maintaining soil productivity, water quality, and other
ecosystem services . National and international environmental sustainability principles
and certification systems are important for protecting resources .
Encourage Broad Rural Economic Benefits. Fiscal and land use policies to determine
how broadly the economic revenues from biofuels are spread and how they will shape
rural economies.
Facilitate Sustainable International Biofuel Trade. Continued rapid growth of biofuels
will require the development of a true international market in these fuels
Efficiency and Improved Public Transport. BThe State biodiesel program is being be
developed within the context of a broad transformation of the transport sector aimed
at improving transport efficiency.

11. The State efforts
To achieve the efficacy, the State Government has undertaken a
profound revision of its structure, including the empowerment of the
development apparatus with a greater flexibility in order to meet the
new demands of society .
The objective of Minas Gerais development is now to increase the
competitiveness of its economic base, targeting the state’s supply
chains, transforming comparative advantages into real and enduring
competitive advantages.
The new model gives primacy to the private initiative in determining
the economy’s dynamic as well as an elevated degree of openness to the
international economy.
Bio-fuels production has driven special attention from the State
Government and counts with its full support and incentives.

12. The State program for bio-fuels
The program, set forth in Law no. 15.976/2006 has the following goals:
Research and technology development;
Technology transfer to the private sector;
Job posts creating and improvement of income distribution;
Reduction of fossil diesel imports;
Reduction of gas pollution emission;
Development of Feed-stock production
Targets up to 2007/2008 :
250.000 hectares crop plantation for production of B2 (blend 2% ),
reaching 625.000 he for production of B5 in 2013;
Direct income generation to 100.000 families, corresponding to about
500.000 job posts up to 2007.

13. entrepreneurial state culture
While the State of Minas Gerais assumes the role of promoter and
clearinghouse for investments, it is aligned with the basic concepts of this
new entrepreneurial culture, which involve:
overcoming bureaucratic bottlenecks that inhibit the adoption of
performance-based models of administration.
breaking with inefficient management practices.
decentralizing and opening spaces for the involvement of the private
sector in the process of development.
managing fiscal crises, economic externalities, and imperfect contracts
in the credit markets;
overcoming the lack of clear regulatory function and market credibility;
Long-term planning: research and development programs that present an
investment portfolio for attracting private sector interest;
Coordination among diverse state development institutions: cutting
waste, redundancies, and loss of efficiency.
“ Minas Gerais is presents Brazil with a new management model. We have left
behind that motto that Public services are inefficient by nature. We are bringing
private sector management methods , with performance evaluation and the
establishment of goals to be achieved. “ ( Governor Aecio Neves)

14. economic overview
TRANSPORT: Largest road network in Brazil: 265.000 km and extensive railroad
network: 5.080km, ensuring logistics and easy flow of products to main domestic
markets and export through the most efficient ports in Brazil: Santos, Rio de
Janeiro/Sepetiba and Vitoria.
COMMUNICATION: 5 million fixed lines and 3 million mobile lines. Fiber optic links
connect the State to the main cities. Minas is reckoned as the benchmark for the
quality of its communications.
EDUCATION: the high quality of Minas education has been internationally recognized
by UNICEF: 15.945 basic education schools, largest university network.
ENERGY: one third production of the electric power of the country.
INVESTMENTS: it has been committed in excess of USD 100 billion in the next couple
of years
LEGISLATION: modern and operative regarding investments, keeping up with
international standards. Minas people and institutions are traditional in their respect
and commitment to agreements and contracts
INTERNATIONAL AIRPORT: The Tancredo Neves Airport is one of the most modern
airports and, for its exceptional conditions, has been chosen to be the first one to set
up the industrial park concept, creating a free trade zone for import, export and
distribution. Companies will receive from State exceptionally favorable fiscal
conditions and other incentives.

15. comprehensive facilities
CAPITAL INVESTMENTS: protected by the Central Bank of Brazil, allows to
convert credit into investments which can be set off against imports of assets
without exchange coverage.
ACQUISITION, MERGING, FUSION: fully supported by Brazilian corporate laws.
TECHNOLOGY TRANSFER: Brazilian intellectual property law regulates the
application of patents.
FUNDING, FINANCING AND INCENTIVES: besides national incentives, Minas
offers a variety of financing schemes and incentives for new projects and
competitiveness of existing ventures through its State development bank – BDMG,
such as:
FIND (INDUSTRY INCENTIVE FUND): a credit instrument to foster industrial
development through two financial support programs, financing fixed
investments and working capital.
FUNDIEST: designed to develop strategic industries.
FDMM: to fund mineral and metallurgical projects
FUNDESE: for small and medium-size companies dedicated to new technologies.
PRO-FOREST: to fund forestry activities.
FASTUR: financial incentives to tourism in regions of recognized potential.

16. comprehensive facilities
In its efforts, BIOVALE counts with a number of efficient State organizations, working together to
accelerate and stabilize the implementation of your investments, such as:
SEDE – The State Secretariat of economic development: is in charge of the overall activities related
to the economic development of the State.
BDMG – The Development Bank of Minas Gerais: manages state funds and finances enterprises.
CDI- The Company of Industrial Districts of Minas: is in charge of industrial areas making available
full infra-structure.
FIEMG: The Federation of industries of the State of Minas Gerais -congregates 130 industry
association, representing 80.000 industries in Minas Gerais. It has an international division to assist
international affairs.
INDI – Integrated Development Institute: It carries out research, elaborate investment opportunities
in the State and assists interested investors.
JOÃO PINHEIRO FOUNDATION: renders technical services related to economic and social
development.
CETEC – Technological Center Foundation of Minas: researches projects and technological services.
EUROCENTRO/AL-INVEST: is a cooperation program between European and Latin American
companies and institutions.
MINASINVEST: It is an investment promotion agency created by the civil society with the full support
of the State Government and private sector.
BRAZIL TRADE NET/SIPRI: created by the Ministry of Foreign affairs to foster Brazilian exports.
PARTNERSHIP SEARCH DATABASE: managed by the European Commission, it is an important tool to
assist small and medium size enterprises search for partners for transnational cooperation.