BIOVALE PROJECT: A BIODIESEL BUSINESS

AS AN AGENT OF SOCIAL INCLUSION IN BRAZIL

goalsTo set up a pool of highly professional entities to

organize the bio-diesel production chain based on Jatropha curcas feedstock, elaborating turn-key projects 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 ENERGIA, a recently set up Brazilian corporation for this purpose.

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 )

“ We folks have to get out of the dry hinterland! But one only gets out of the dry hinterland is taking it over from inside...” (Guimarães Rosa)

empowering the poor groups

If the conditions could be created for these small producers to become more effective in production and trade, poor groups could contribute significantly to achieving a higher and more sustainable pace of development, promoting not only economic growth but social cohesion.

But such conditions will not come about easily or quickly. The legacy of history and the long marginalization of poor groups in terms of the distribution of land and other assets, in terms of institutions and of centuries of inequity in access to education, nutrition and health, create too great an obstacle.

These obstacles must be addressed and overcome if the challenging targets on poverty reduction are to be achieved. Acting directly on poverty means addressing their constraints.

empowering the poor groups

Sustained growth can be achieved only by creating conditions in which poor groups can increase their productivity and output.

Empowering these poor groups is not a diversion from promoting growth. On the contrary, it is an effective, and perhaps the only, way of achieving sustainable growth.

But empowerment will serve little purpose if the material means for increasing production and incomes are not available to the poor.

Enhancing their skills and building the human capital of the poor will have a major impact on both their economic productivity and their human dignity.

By improving the productivity and sustainable management of landand water, technological advances offer the potential to address many of the obstacles that the lack of assets imposes on the poor.

Access to extension services, market and technology must be relevant to the conditions of the poor and they must have access to it.

principles commitments

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 initiativeUNEP – Finance Initiative – UN Global Compact

Corporate social responsibility

The Sell Side of important financial markets is recognizing themateriality of corporate social responsibility.

Social and environmental issues can materially affect stock prices, particularly over the long-term and sometimes even in the short-term.

“Business is part of society, not outside it. When we talk about corporate social responsibility, we don’t see it as something business does to society, but as something fundamental to everything we do…not just philanthropy or community investment, but the impact of our operations and products as well as the interaction we have with the societies we serve. CSR is not a soft issue or a nice to do activity on the fringe of business. It is central to doing business. It is challenging to manage and it is a hard edged business issue.” (expressed by the giant Unilever at the London business School)

We encourage organizations and investors to scrutinize our project/corporation as an attractive option to their socially

responsible investments.

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

Brazil: the biomass source

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 institutions collaborating to create conditions that emancipate poor groups.

But the fundamental partnership, and ultimately the only one that counts, is with the poor themselves. They have the talents, the skills and the knowledge of their own environment.

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 biofuelproduction 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.

energy & prosperity

Most poor households in developing countries lack access to modernfuels. They instead rely on traditional biomass fuels like cropwaste,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.

Although modern fuels tend to be more costly, they do provide people with far greater opportunities for income generation.

Climbing the energy ladder towards moremodern fuels, therefore, is a challenge most poor people in developing countries must face in order to improve their overall standard of living.

Source: REN 21/2006

electricity x fuels

Electricity and fuels can produce different energy services.

Electricity is essential for modern communications, supporting modern industry and the provision of public services.

Fuels, on the other hand, are essential for all households. Unless basic fuel needs are met, electricity is a luxury item few can afford.

As such, the importance of electricity versus fuels varies based on thedifferent needs of the poor and the economic and social circumstances that enable their use. Sensitivity to the differential impact that electricity can have on the poor is crucial to planning and prioritizing energy-related programs and projects.

Bio-oils and bio-diesel are supportive to the generation of cheaper mechanical and electrical energy, besides powering water pumps for irrigation and human consumption (enhancing potentially the production of feed-stock seeds.

Source: REN 21/2006

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

Our local partners

The poor have to be recognized as individuals with rights and as potential agents of change who can themselves play an increasing role.

In determining social and economic outcomes poor groups should not be seen merely as a burden on society. Rather, the poor, especially women, are hard working and often effective microentrepreneurs.

Our local partnersAnd environment

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)

General intervention strategies

MARKET SIGHTCompetitiveness and productivity: adoption of compatible mechanisms

SOCIAL SIGHT

SPACE SIGHT

BUSINESS SIGHT

InclusionParticipationEquity

Regional clusters formation

Adequate logistics

Attractiveness to private sector Favorable climateCompatible working tools

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

Development model: Foreign Development Agency

Direct main responsibilities of the development agency :

To provide seed money and matching grants that can initiate and support the efforts of the NGO to raise the money needed for a project and/or provide capacity grants which help to build their organizational capacity.

To popularize the NGO achievements in developing sustainable energy systems and related environmental protection plans through the media, internet, and other written and visual sources (SLUIJS & BODE, 2001).

To facilitate trainings for NGOs such as; community surveys of power demand and potential usage, site selection, the budget process, choice of appropriate technology, environmental assessments, feasibility studies, civil design, operational & fiscal management, micro-enterprise development, long term planning, and grant writing (SLUIJS & BODE, 2001).

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:

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.

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.

End goal & management

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.