The challenge

PPBio, the Bioeconomy Priority Programme, was designed based on a public policy of the Brazilian government. This policy saw companies located in the Industrial Pole of Manaus (PIM) benefit from tax incentives if they invested 5% of their revenues in research and development. PPBio provides solutions for sustainable economic exploitation of biodiversity in the Western Amazon (Acre, Amapá, Amazonas, Rondônia and Roraima states). Therefore, companies that invest in PPBio are automatically investing in the research and development of bio-businesses in the Amazon. Investment through the Programme allows a company to solve its own production demands or share in the financial gains of new businesses.

Despite a 2018 law requiring tech companies operating in the Manaus region (PIM companies) to allocate a percentage of their profits to research, development and innovation, the Programme has not gained enough income or traction to be able to develop bio-businesses.

One way to tackle this problem and boost bioeconomy in the Amazon is to get better structured research projects and initiatives, that will make the Programme more attractive to tech companies to fulfil their obligations, thus influencing them to be more disposed to allocate their obligated funding for Priority Programmes towards PPBio.

The project

The project aimed to scale up PPBio by:

  1. Establishing a structure for investments in bioeconomy through a business incubator model and a portfolio of new investment opportunities, considering obligatory and investor requirements;
  2. Structuring a scale-up strategy for PPBio (according to its fundraising potential), as well as an in-depth analysis on the bioeconomy ecosystem’s growth potential, and IDESAM's necessary operational capacity to support these projections, and;
  3. Structuring and implementing a communication strategy to better disseminate PPBio and its bio-business portfolio to key stakeholders, including investors/PIM companies, entrepreneurs, incubators, among others.

Complementary to the first phase, the second focused on reinforcing the results achieved by PPBio by implementing a strengthening strategy connecting agents and solutions raised in the bioeconomy productive sectors and fortifying the presence of PPBio in the Amazon.

Through this project, P4F focused on establishing ways to consolidate the culture of tech/PIM investment in business in the Amazon bioeconomy.

Expected impact

Economic and social value: The first phase of the project was expected to raise £2 million in one year initially, but it mobilised more than £17 million. In the NCE, the project expects to raise more than £4.8 million. Results of the two phases of the project are expected to include:

  • mandatory investments from PIM companies, including at least 25 new bio-businesses supported though PPBio by the Manaus Free Zone companies (15 already achieved in the first phase);
  • the implementation of an online information system increasing the efficiency of management processes;
  • enabling PPBio’s scale-up strategy through the 7% fee rate to its coordinator;
  • the creation of network with at least 35 companies committed in investing in PPBio (27 already achieved with the first phase).

Environmental value: The project fostered the market for new bio-businesses related to NTFPs and restoration. The development results from sustainable management products and practices, such as products from extractivism, increasing the value of standing forest (natural capital) and decreasing the risk of deforestation.

Impact

The incubation model developed throughout the project proved to be efficient in selecting, training, and supporting initiatives that will carry out technology and solutions to the Amazonian bioeconomy. Further, the communication strategy allowed a broad dissemination of PPBio while crowding in stakeholders of the bioeconomy chain and investors interested to apply resources in the programme. All these activities led to a scaling up of funds raised by PPBio. In the first phase of this project, (November 2021 to April 2023), PPBio mobilized £17.2M through 89 capital injections made by companies located in the Industrial Pole of Manaus (PIM), and P4F´s support contributed directly to this investment mobilization.

P4F support

In the first phase, P4F supported IDESAM to scale up PPBio by developing an incubation model and a scale-up strategy through support to a portfolio of 15 bio-businesses, in addition to consolidating IDESAM´s operational capacity as the Program’s coordinator.

During the second phase, P4F aims to bolster and consolidate first phase activities, along with enhancing PPBio's presence in the bioeconomy national scenario. These involves securing commitments from an additional seven companies to invest in PPBio and supporting the inclusion of 10 new bio-businesses in the portfolio.

Future potential

There is a real potential for the successful design of the incubation model to be replicated by other businesses, incubators and accelerators in the Amazon, orother regions of Brazil. This could be achieved by disseminating the strategy developed and validated to incentivize other organizations and businesses to invest and foment the Amazonian bioeconomy and market for NTFPs. In addition, there is a plan for new productive chains of the bioeconomy be incorporated into the research programs of PPBio, aiming to boost solutions and innovations in those chains.