At Finep, neo-industrialization is already a reality – 01/29/2024 – Market

On the 22nd, during the 18th meeting of the CNDI (National Council for Industrial Development) and with the presence of President Lula, the NIB (New Industry Brazil) program was launched. The CNDI was created in 2004 and reactivated in 2023. It is chaired by vice-president Geraldo Alckmin and composed of 21 representatives from the government and 21 from society.

The NIB is an initiative debated at the CNDI and aims to regain the leading role of national industry through six major axes, with investments estimated at R$300 billion by the end of the current government. The main financing agents will be BNDES and Finep (Studies and Projects Financier). Of this total, approximately R$240 billion will be resources available at market rates and the remainder at differentiated rates or in grant format for programs focused on innovation or sustainability.

Finep manages the FNDCT (National Fund for Scientific and Technological Development), created in 1969. Recently, in an articulated action between the National Congress and organizations from the business sector and the scientific ecosystem, LC 177/21 was approved, which modified the FNDCT, transforming it into an accounting and financial fund, prohibiting the contingency of its resources.

The FNDCT is made up of 16 sectoral funds. In January 2023, it had a stock of R$16 billion and was estimated to collect and execute R$9.98 billion. With the recovery of the economy and well-adjusted management, the fund raised 20% more. Its main revenues are royalties from technology and own resources. Own resources are the result of investments with the Fund’s stock of resources and the receipt, by Finep, of amounts relating to financing installments. In the budget approved for the 2024 fiscal year, the FNDCT has revenue of R$11.9 billion. A powerful fund, made up entirely of extra-budgetary revenues.

In March 2023, President Lula changed the interest rate charged with FNDCT resources, abandoning the TLP (Long-Term Rate) and starting to use the TR (Reference Rate). Thus, the interest rate charged by Finep plummeted from approximately 6% to less than 2% per year. This rate can only be applied to financing aimed at innovation.

At Finep, neo-industrialization has already begun and is going with full force. In 2023, we financed 637 projects that fall within the six missions defined by the CNDI, totaling R$5.73 billion. Of these, R$1.65 billion were in the form of grants, when Finep invests FNDCT resources without the need for a return. In the form of loans, R$4.06 billion were allocated, of which more than R$700 million were allocated to 304 micro and small companies. When we look at missions, those that received the most resources were decarbonization, energy transition and bioeconomy, totaling R$1.9 billion; digital transformation with R$1.37 billion; defense industry with R$982 million. The health sector received R$480 million.

At the CNDI meeting on January 22nd, Finep announced 11 economic subsidy notices, totaling R$ 2.18 billion, with highlights for R$ 500 million in the health area, R$ 270 million for mobility and R$ 250 millions for food security with sustainability.

Having a bold program to revive the industry in Brazil has proven to be fundamental in recent years and a legitimate aspiration for Brazil. We are the 9th largest economy in the world, constituting approximately 2.4% of the planet’s GDP. However, we represent only 1.3% of global sales. We have the 14th largest scientific production in the world, but according to the Global Index Innovation 2023, we are the 49th nation in terms of innovation in the economy.

In recent years, the country has suffered from a lack of nationally structured policies. NIB broke this cycle. It was built in a participatory manner in months of debates between public and private agents, sectoral ministries, public entities, associations of businesspeople, workers and research institutions with the aim of implementing an industry based on technology, decarbonized, sustainable and generating jobs.

This model has been used in the main economies of the planet, and Brazil cannot once again leave aside an opportunity in the present to just aim to be a country of the future.