Brazil Doubling Sugar-Cane Biomass Research Plan to $988 Million

BNDES, Brazil’s national development bank, and the research-financing agency Finep plan to provide 2 billion reais ($988 million) for ventures developing new techniques to process sugar cane into fuel and specialty chemicals through 2014, double the initial plan.

The two government agencies may approve 300 million reais in loans and grants for projects this year, 700 million reais in 2013 and 1 billion reais in 2014, Carlos Cavalcanti, head of biofuels at Rio de Janeiro-based BNDES, said in an interview at a conference in Sao Paulo yesterday.

The agencies are expanding support for the research program in response to growing interest in converting cane residues into useful products, he said. Companies including Dow Chemical Co. (DOW), DuPont Co. and Braskem SA (BRKM5) have proposed projects worth more than 3 billion reais that have passed an initial selection phase.

“Demand was higher than our forecast budget,” Cavalcanti said. The funds “will be concentrated in a few projects.”

Banco Nacional de Desenvolvimento Economico e Social and Financiadora de Estudos e Projetos, as the two agencies are formally known, announced in March 2011 plans to provide 1 billion reais to finance research into second-generation ethanol technologies, techniques to make new products from cane and gasification processes.

BNDES approved the first grant under the initiative last week for a project by Heerlen, Netherlands-based vitamin maker Royal DSM NV and Brazil’s Institute of Technological Research, he said. The companies are developing technology to make succinic acid, a sweetener, from sugar cane.

To contact the reporter on this story: Stephan Nielsen in Sao Paulo at snielsen8@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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