2. goal
To set up a pool of highly professional entities to
organize the bio-diesel production chain based on Jatropha
curcas feedstock (from soil to oil)
promoting sustained development and poverty
alleviation, creating opportunities and a new model for
the intensive and extensive use of the energy biomass
potential of Brazil.
Main focus: most vulnerable region of Brazil: Semi-arid,
particularly, Jequitinhonha and Mucuri Valleys, in the Minas
Gerais, Bahia and Espírito Santo States (Meso Vale)
Final target: to consolidate a socially responsible and state-of-art
biodiesel holding industry in Brazil in partnership with BIOVALE
ENERGY, a recently set up Brazilian corporation for this purpose.
3. vision
“Take joint actions and improve efforts to work together
at all levels to improve access to reliable and affordable
energy services for sustainable development sufficient to
facilitate the achievement of the MDGs, including the
Goal of halving the proportion of people in poverty by
2015, and as a means to generate other important services
that mitigate poverty, bearing in mind that access to
energy facilitates the eradication of poverty”
( Summit on Sustainable Development in the
Johannesburg Plan of Implementation )
4. Principles Commitments for Responsible Management
As a socially responsible corporation, we commit to the following :
1. We will incorporate ESG (Environment, social responsibility and Corporate
Governance) issues into general management, investment and decision-
making processes.
2. We will be active managers and incorporate ESG issues into our management
and investment policies and practices.
3 We will seek appropriate disclosure on ESG issues in our management and in
the entities in which we invest and/or attract investment.
4. We will promote acceptance and implementation of the Principles within our
organization.
5. We will mobilize to enhance our effectiveness in implementing the Principles.
6. We will report on our activities and progress towards implementing the
Principles.
In compliance with UN General Secretary initiative
UNEP – Finance Initiative – UN Global Compact
5. Principles Commitments for Responsible Management
As a socially responsible organization, we have a duty to act in the
best long-term interests of our beneficiaries and partners.
In this fiduciary role, we believe that environmental, social, and
corporate governance (ESG) issues can affect our ability to attract
investment.
We also recognize that applying these Principles may better align the
beneficiaries with broader objectives of society
In signing the Principles, we publicly commit to adopt and
implement them, where consistent with our responsibilities.
We also commit to evaluate the effectiveness and improve the
content of the Principles over time.
We believe this will improve our ability to meet commitments to
beneficiaries as well as better align our investment activities with
the broader interests of society.
6. Linking the various stakeholders
The main objective of the Hub is to bring capabilities of the various
stakeholders involved in the bio-diesel production chain, both in Brazil and
abroad providing resources and diffusing knowledge to the linked firms.
The benefits provided through such linkages are of great significance because
of the complimentary capabilities among the stakeholders.
Linkages with foreign organizations can be a great driver of dynamism and
competitiveness to develop effectively and rapidly the Brazilian bio-diesel
program. The foreign firms benefit from linkages are reduced costs, local
market and product intelligence and enhanced assets (UNCTAD 2001).
MINASINVEST´s interventions, as a leading IPA (Investment promotion agency)
are important to the extent that investors believe that an enterprising IPA can
assist them in identifying and introducing reliable local firms and
organizations with whom the investors can partner.
The linkage envisages upgrading domestic enterprises; facilitating the
transfer of technology, knowledge and skills; improving business and
management practices; and facilitating access to finance and markets.
7. Market scenario and prospects
the price of
crude oil tripled
between early
2002 and mid-
2005 while
natural gas
reaches a level
six times greater
than ten years
earlier.
Source: GTZ/WorldWatch Institute
8. The growing gap
energy companies have not invested in building
enough refinery capacity to meet the growing level of companies have
world demand. World oil production has gone up by 40% not been able to
in the past 20 years while refinery capacity has only find enough new
gone up 15%. oil and gas fields
to replace the
exhausting ones.
Oil is being
pumped out of
the ground three
times faster than
it is being
replaced by new
oil finds.
the oil reserves discovered between 1950 and 1980 are being run down.
Source: GTZ/WorldWatch Institute
9. Will oil prices rise further?
"There are not enough large-scale projects in the development
pipeline right now to offset declining production in mature oil fields
and to meet global demand growth beyond 2007". (Chris Skrebowski,
the editor of the Petroleum Review )
The total amount of
energy that the world
gets from oil and gas
will begin to decline
after 2010.
Source: GTZ/WorldWatch Institute
10. What alternative sources to fill the gap?
The global demand for oil is increasing by just over 2%
every year at present.
This increase in demand added to the gap being created
by the declining supply, implies new energy sources each
year equivalent to 4-5 per cent of the world's current oil
production:
around 1,800 million barrels of oil a year.
In 2015, when world gas output ceases to increase to
meet the its growing demand , the new energy sources
would have to increase the annual rate at which they grew
by another 900 million barrels.
Source: GTZ/WorldWatch Institute
11. What will be the effect on the global economy?
a fall in global oil output will cause
the global economy to collapse.
Source: GTZ/WorldWatch Institute
12. What alternative sources to fill the gap?
The only truly sustainable energy sources are those based
on the flow of energy from the sun: solar, hydro, wind,
wave, biomass.
These flows are very large in comparison with humankind's
use of energy.
Renewable sources can therefore meet all the world's
energy needs, both now and in the future.
The amount of energy supplied by renewable sources
could be 120 times its present level .
The problem is to develop these sources
quickly enough to fill the gap as it opens up.
Source: GTZ/WorldWatch Institute
13. Biofuels: a Booming Industry
The world is on the verge of
unprecedented growth in the
production and use of biofuels , by
virtue of:
Rising oil prices, national security
concerns, the desire to increase farm
incomes, and a host of new and
improved technologies .
The two most prevalent biofuels are
ethanol and biodiesel.
World production of ethanol more
than doubled between 2000 and 2005,
while production of biodiesel
quadrupled.
14. Biofuels: a Booming Industry
Brazil and United States
dominate the world ethanol
production and use.
The European Union, and
Germany in particular,
dominates world biodiesel
production and use.
15. New Technologies, New Gains
Biofuel production
has become
substantially more
efficient over the last
25 years as Brazil and
the United States
have scaled up their
industries.
Such incremental
gains are likely to
continue for years to
come.
However, the greatest potential for biofuels lies in the
development of new technologies that will significantly expand
the range of biomass feedstock, increase conversion efficiencies,
and lower production costs.
16. Brazil: the biomass source
Biofuels – the emerging solution for
everyone
“ Only in the Sun Country occurs the magnificent encounter
of the solar irradiation with the water, which generates a
stunning energetic profusion in its soil. This energy is a
heritage inherent to the Brazilian people and so it should be
exploited and used to promote its social and economic
development.” Artur Augusto Alves
The ability to grow energy crops in addition to food crops could
transform agriculture more profoundly than any development since
the green revolution - helping to achieve the United Nations’
Millennium Development Goals
17. our challange
In modern economies, large scale poverty imposes an enormous
economic loss, wasting the talents and energies of hundreds of
millions of people , diverted from socially productive activities that
could create wealth for society to the struggle for mere survival.
The partnerships
should be at the
global level, at the
country level with
national
stakeholders and
external partners
acting together,
the private sector
and civil-society But the fundamental partnership, and
institutions ultimately the only one that counts, is with the
collaborating to poor themselves. They have the talents, the
create conditions
that emancipate skills and the knowledge of their own
poor groups. environment.
18. Biofuels: A New Future for Rural Communities
One of the main benefits of biofuels is their potential to increase
farm incomes and strengthen rural economies. The World Bank
reports that biofuel industries require about 100 times more workers
per unit of energy produced than the fossil fuel industry.
In 2004, the Brazilian sugarcane sector was responsible for 1 million
jobs (direct)/4 million (indirect) corresponding to the production of
350 million tonnes of cane (UNICA, 2003 and Goldemberg, 2003).
The dispersed nature of agriculture makes it unlikely that biofuel
production will become as centralized as the oil industry.
In the focused region of the project (Jequitinhonha & Mucuri Valleys)
the access to modern forms of energy is limited or absent. An
orchastrated pool of competences involved in the biodiesel
production chain can help provide income and clean, accessible
energy that is vital for rural development and poverty alleviation.
19. Energy & prosperity
Most poor households in developing
countries lack access to modern
fuels. They instead rely on traditional
biomass fuels like crop
waste,dung, and wood to meet their
basic energy needs.
When used with inefficient devices these
low-quality fuels often result in harmful
health and environmental impacts.
The order of fuels on the energy ladder
corresponds to their efficiency and
‘cleanliness’ at end use.
Climbing the energy ladder towards more
Although modern fuels tend to be more modern fuels, therefore, is a challenge
costly, they do provide people with far most poor people in developing countries
greater opportunities for income must face in order to improve their
generation. overall standard of living.
Source: REN 21/2006
20. energy link to overall human development
There is an empirical
basis to the relationship
between access to
modern energy and
human development.
Energy is strongly linked
to human development.
No country in modern
times has substantially
reduced poverty without
a massive increase in its
use of energy and/or a
shift to efficient energy
sources.
Source: REN 21/2006
21. Further benefits
In general, biofuels have a solidly positive GHG balance. Energy crops
have the potential to reduce GHG emissions by more than 100 percent
(relative to petroleum fuels) because such crops can also sequester carbon
in the soil as they grow.
Large deforested areas could be recovered by crops producing
vegetable oils in order to produce biofuels.
Even with subsidies, the economic savings with biofuels from avoided oil
imports are considerable: between 1975 and 1987, ethanol saved Brazil
$10.4 billion in foreign exchange while costing the government $9 billion
in subsidies. This investment paid off even more in subsequent years:
studies show that from 1976–2004, Brazil’s ethanol production substituted
for oil imports worth $60.7 billion—or as much as $121.3 billion including
the avoided interest that would have been paid on foreign.
22. RET OPPORTUNITIES
Renewable energy will have to supply a greater share of the world's
energy requirements.
It is estimated that the market for clean energy technologies could
be worth $1.9 trillion by 2020. The financial sector has a key role to
play in developing and promoting this market.
In the next 25 years, the world will consume all that has been
produced in fossil oils so far.
The world´s dramatic increment for fuels should be supplied by bio-
fuels.
In the future, In the short run, ETHANOL and BIO-DIESEL are the
main bio-fuels.
Renewable energy is both a solution and a business
opportunity; BUSINESS AS AN AGENT OF WORLD BENEFIT
23. Biodiesel - a Mutual Profitable Partnership
As oil prices and environmental concerns have risen in the past few
years, investment in new biofuel facilities has mushroomed in Brazil.
The Brazilian National Program for use and production was
incorporated in the Brazilian energy matrix by Law nr 11.097/2005 .
Large trans-national corporations, as ADM, have already started
investing in biodiesel projects in Brazil
The crop area required to produce the blend of initial mandatory
2% of biodiesel will be 1.5 million hectares, equivalent to only 1% of
the total acreage under crops or available for agriculture throughout
Brazil (150 million hectares).
BIOVALE ENERGY: YOUR PARTNER IN BRAZIL – FROM INCEPTION TO CONCEPTION
25. Brazilian ethanol´s use and production
PRODUCTION CAPACITY: 18 billion liters/year
PRODUCTION: 15 billion liters/year (seed/2004/2005)
EXPORTATION: 2.4 billion liters in 2004
SUGAR CANE PLANTED AREA: 5.6 million hectares
POTENTIAL FOR AGRICULTURAL EXPANSION IN BRAZIL:
90 million hectares of arable lands – Without any forest removal
INTEGRATED PRODUCTION OF SUGAR AND ETHANOL:
Provide production flexibility
UTILIZATION OF ETHANOL IN VEHICLES IN BRAZIL:
Automobiles, light commercials, motor-cycles and aircrafts
Flexible Fuel light vehicles: reached 37% of internal market sales in
2005
26. Brazilian National Plan for Biodiesel
The Nacional 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
27. 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.
28. Brazilian domestic market projection
Law 11 097/2005: it sets forth a mandatory use of biodiesel
mixture to diesel, which reflects in the following prospects
2020
2020
20%
12,4
12,4
billions
billions
liters/year
liters/year
Source: MME
29. Brazil’s export potential
With the launch of commercial production, Brazil
becomes a potential exporter of biodiesel.
The EU aims to ensure that 2% of all the fuel consumed
in the region is renewable by 2005, but it has limited
acreage available for growing rapeseed, the main
feedstock produced in Europe, and industrial capacity is
insufficient to meet the stipulated demand.
Despite these constraints, the proportion of renewable
fuels is set to reach 5.75% by 2010 according to EU
Directive 30, ratified by the European Parliament in May
2003.
Given the limitations for production growth in Europe,
Brazilian biodiesel enjoys an unprecedented opportunity
to build market share in the continent Europe.
30. Features of envisaged agricultural 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)
31. Possible partners
Countries : Companies :
Bearing high agricultural Having to meet social and
production costs environment responsibilities
Bearing internal/external Bearing environment liabilities
obligations of emission reduction
(Kyoto Protocol and other Willing to attract SRI
compromises) and valuing their stock prices
Bearing scarcity of cultivation Bearing intensive need of fuel
lands sources
Willing strategic alternatives Investors in prospective high
for diesel supply return SRI
BIOFUELS: FUTURE´S MOST PROSPECTIVE INVESTMENT
32. Prospects of biodiesel cooperation/partnership
Possible areas of interest:
Utilization of Partners technology for biodiesel plants in
building, logistics, utilization of glycerin and other by-
products, specification, engine tests, etc.
Sale of carbon credits (MDL) obtained through the
utilization of biodiesel in Brazil.
Export of vegetal oil and biodiesel to Partner´s country.
Exploitation of the potential domestic market
33. “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
34. 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.
35. 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.
36. 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.
37. Focus: surrounding of CEMIG´s Irape Hydroelectric plant
Cemig – Companhia Energética de Minas
Gerais, is one of the largest electric energy
utilities in Brazil.
With an installed capacity of more than 6
thousand MW (6 GW), the company is in
charge of the operation of a 330-thousand-
kilometer distribution network, the largest in
Latin America, and supplies energy to over 16
million people living in the state's 774
municipalities.
Cemig is permanently
forming partnerships with other
entrepreneurships which is generating
substantial investments.
For the sixth consecutive year, Cemig was
listed in the Dow Jones Sustainability World
Index – DJSI World.
38. Main features of the focused region
Our local partners
And environment
40. Jatropha curcas: the feedstock
Perennial crops of Jatropha Curcas will be used to protect lands that are
vulnerable to erosion and to restore lands degraded by grazing.
The yields of currently used biofuel feedstock vary widely. Jatropha
seeds have proven advantageous in several spheres.
41. Jatropha curcas: the feedstock
Jatropha is identified under the physical-chemical platform of
biomass energy conversion route. It is a drought-resistant
perennial, living up to 50 years and growing on marginal soils
(HENNING, 1996).
The remote rural communities of the Brazilian semi-arid in drought
regions will be able to address their energy needs using the
Jatropha resource.
The Jatropha Curcas was especially selected because the plant is
not an invasive species (GÜBITZ ET AL., 1999) and permits the
growth of other plants in its vicinity, so it does not negatively
affect the ecosystem.
The results of the researches developed by EPAMIG, the State
Agriculture R&D entity, in the 80´and the preliminary current
( 2004/2006) results attest the potentiality of the jatropha curcas
cultivation in the semi-arid region
42. Professional management
Implementation goals
Internal External
capabilities capabilities
Professional
POOL
monitoring
Roles of strategies
stakeholders
Resources Action plan
management
43. Development model
The development model is based on the working
relationship between the community benefiting
from the BIO-VALE project, a local technical NGO,
an enterprising development agency , a foreign
development agency, Government stakeholders
and a corporation.
Each entity has its respective and important roles
that complement, harmonize and support one
another leading to the ultimate success and
sustainability of the project.
“The private sector can play an important role
towards furthering development, for development
cannot occur without conditions that are amenable to
the conduct of business.” (United Nations)
44. Development model: local NGO
Local NGO´s will support following types of interventions:
establishing effective monitoring and evaluation systems, working
closely with cooperating institutions to improve impact assessment
and supervision, and strengthening partnerships with a range of
different players.
promoting a global policy environment that increases market access
for the rural poor.
directly responsibility to the community - directly involved in the
energy crop cultivation and oil extraction than the development
agency, assessing the communities’ organizational capacity and their
potential to complete and manage an energy project.
providing technical, organizational advice, support and training to
the community
45. Development model: Investment agency
MINASINVEST, a not-for profit investment agency, will be primarily in
charge of the social-economic factors coordinating the efforts among
the various stakeholders, which includes:
enhancing logistics, building market information systems.
Identifying and coordinating the best partners;
Developing policies and strategies to improve competitiveness;
Strengthening the producers´ negotiating position ;
Providing well-researched analyses;
Government and institutional relationships involved in the project.
46. Development model:The Community
The local community possesses direct responsibility towards the day-
today running of the biofuel project . Particular emphasis is given on
the socio-economic empowerment of women, thus women groups will
be specially utilized to manage the project.
The role of the community should therefore be:
● Provision of land for Jatropha plantation and site for the
establishment of the oil extraction unit.
● Responsibility for the day-to-day management of plantation,
including: cultivation and harvesting.
● Commitment of human resources for project development such as
unskilled labor (to handle farmlands), access to skilled labor.
In order to help the community in their quest towards sustainable
development, it is very important that they should be the main
recipient of all benefits accrued from the project.
47. BIOVALE ENERGY & PARTNERS
GENERAL CORPORATE ACTIVITIES
General coordination among the various stakeholders
Resources (financial and management)
Industrialization: oil extraction and trans-esterification
Logistics (sales, distribution, export process, shipping)
GENERAL CONSULTING ACTIVITIES
turn-key/Global solution in BioDiesel projects
Research & Development
Institutional and Government support
Project development, Project Financing an Funding
International product commercialization
Logistics (sales, distribution, export process, shipping)
48. conception
The BIO-VALE project can bring about major economic
empowerment by providing income and employment
opportunities to both the rural communities and entreupreneus.
The project can be utilized to stimulate a circular system
combining ecologic, economic, and income-generating effects
(HEN. 1994), particularly to the drought prone rural
communities of the Brazilian semi-arid regions.
The project promotes the main aspects of development, which
combine to help achieve a sustainable way of life for village
farmers in terms of provision of renewable energy, erosion
control, economic empowerment through job creation and
poverty reduction and economic development.
The favorable context in Brazil, the onset of widespread
distribution, the differential tax regime recognizing the
importance of oilseed production by family agriculture units– and
the introduction of the “Social Fuel” label are regulatory
instruments designed to promote social inclusion throughout the
new fuel’s production and value chain.
