Center for Research on Science, Technology and Society

Igor Santos Tupy
Planning and Research Technician (CTS-IPEA)
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Priscila Koeller
Planning and Budget Analyst (CTS-IPEA)
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Francisco Walsh Mendonça Levy
Former Research Fellow (CTS-IPEA)
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1. Context

Brazil’s current industrial policy was proposed in 2023 through an ordinance issued by the National Council for Industrial Development. One of its distinguishing features is its mission-oriented approach. In 2024, the Nova Indústria Brasil (New Industry Brazil, or NIB) was launched, structured around six missions from which specific objectives and aspirational targets were established.

The policy includes financial, regulatory, and public procurement instruments in its action plan. Under the Mais Produção Plan (P+P), the institutions responsible for its implementation are the Brazilian Development Bank (BNDES), the Funding Authority for Studies and Projects (Finep), the Brazilian Agency for Research and Industrial Innovation (Embrapii), and the financial institutions: the Banco do Brasil, the Caixa Econômica Federal, the Banco da Amazônia, and the Banco do Nordeste.

Support for research and innovation within the P+P framework is included in the Mais Inovação Program. Its resources, initially estimated at R$ 75 billion (around US$ 15 billion) through 2026, come primarily from the National Scientific and Technological Development Fund (FNDCT), managed by Finep (Hamatsu & Souza, 2024).

In a context of restructuring and strengthening the FNDCT, the Mais Inovação Program aims to finance research and innovation directed toward the industrial sector through the following instruments: (i) reimbursable financing, (ii) equity investment, (iii) support for the structuring of the National Innovation System — through investments in the infrastructure of Scientific and Technological Institutions (STIs) and Technology Parks —, and (iv) innovation grants, which constitute the focus of this analysis.

2. Innovation Grants and Resource Availability

Innovation grants consist of a form of nonrefundable financing provided to companies for the development of research, development, and innovation (RDI) projects. This mechanism is one of the support instruments permitted by the World Trade Organization (WTO) and was designed to share risks and address companies’ financing needs for RDI projects characterized by high levels of uncertainty and long maturation periods.

The use of this instrument in Brazil, in its current format, began in 2006, with the FNDCT serving as its main funding source. The program is operated by Finep, the fund’s executive secretariat, and was originally established under the Innovation Law, now supported by the National Science, Technology, and Innovation Framework.

Like other instruments that rely on nonrefundable resources from the FNDCT, innovation grants have also experienced periods of restricted budget execution. The recovery of their financing capacity began after the approval of Complementary Law No. 177/2021 and the expiration of Provisional Measure No. 1136/2022 in early 2023.

Figure 1 illustrates this recovery, showing an increase in available resources in the updated budget appropriation (initially approved budget law plus supplementary credits minus deductions throughout the fiscal year) starting in 2022. The share of innovation grants also recovered within the overall FNDCT budget, reaching 10.4% in 2026, the highest level since 2012.

When only nonrefundable FNDCT resources are considered, the recovery of the instrument is even more evident, reaching in 2026 its highest share since the beginning of its implementation: 21%. This increase appears to reflect the convergence of two factors: the recovery and greater predictability of FNDCT resources and the establishment of the new industrial policy, which places innovation among its priorities.

Figure 1 — Evolution of innovation grants to firms within the FNDCT, current budget appropriation values (2006–2026).

Source: SIOP and IBGE. Available at: https://www1.siop.planejamento.gov.br/QvAJAXZfc/opendoc.htm?document=IAS%2FExecucao_Orcamentaria.qvw&host=QVS%40pqlk04&anonymous=true and https://sidra.ibge.gov.br/tabela/1737. Data extracted on February 26 and March 12, 2026, respectively. Prepared by the authors.

Note: 1. For 2026, data on the current budget appropriation refer to the amount approved in the Annual Budget Law and to credits and cancellations recorded up to February 25, 2026. These figures may be subject to change in subsequent months as additional credits and cancellations are processed.

In 2025, in particular, Law No. 15.184 was enacted, amending Law No. 11.540 and increasing the availability of reimbursable FNDCT resources used for credit to firms. This shift helps explain the reduction in the share of economic grants within total FNDCT funding.

Innovation grants are implemented through public calls. In general, funded projects have a planned duration exceeding 12 months. For this reason, ensuring stable and increasing levels of funding is essential, as it enables the payment of contracted projects over time and allows for the launch of new calls for proposals.

In 2023, following the release of funds, Finep launched several public calls; however, it was with the NIB, under the Mais Inovação Program, that these initiatives intensified, becoming organized around themes explicitly linked to the established missions.

3. Special Calls — Mais Inovação Program

Within Finep’s scope, the Mais Inovação Program included, in its first round (comprising calls launched between January and February 2024), the implementation of 11 public calls for nonrefundable funding, covering various policy missions, some of which were addressed in more than one call.

Among the calls launched, ten involved direct innovation grants to firms. The series of calls that make up the Mais Inovação Program sought to select projects that, in addition to being aligned with the priorities of the NIB missions, exhibited a high degree of innovation as well as economic and social relevance.

Projects could be submitted on a rolling basis within defined submission windows and were evaluated according to criteria related to relevance, degree of innovation, technological risk, and alignment with industrial policy objectives. The calls from the first round of firm-level grants are presented in Table 1.

Table 1 — Calls, Finep Mais Inovação Program, Direct grants to firms²

Source: Finep (2026). Available at https://finep.gov.br/images/chamadas-publicas/. Accessed on February 19, 2026. Prepared by the authors.

Notes: 1. The starting dates of the periods correspond to the publication date of each call notice. 

2. Eligible applicants do not include non-profit legal entities (associations, foundations, cooperatives), individual entrepreneurs, or individual microentrepreneurs. STIs may only participate as project partners. 

3. Project funding limits vary according to the type of arrangement (simple or network-based). 

4. Project funding limits vary according to the size category of the largest firm within the consortium. 

5. Project funding limits vary according to the thematic line.

The direct innovation grant calls to firms involved R$ 2.1 billion (around US$ 420 million), including supplementary allocations. The rules established differentiated funding limits and co-funding requirements per project, depending on the size of the firm or, in the case of projects developed in partnership between firms and STIs, the consortium structure.

In general terms, across the set of calls, several aspects stand out, including differences in the volume of allocated resources and in the minimum and maximum grant amounts established for projects. The minimum threshold defined in the calls is also noteworthy, as it appears to indicate an effort to increase the average project value already at the stage of the calls themselves. In this sense, the introduction of this requirement seems to respond to one of the critiques found in the literature on innovation grant funding, namely the relatively small average size of projects, which has been interpreted as evidence of resource fragmentation (Hollanda, 2010; Morais, 2012; Brasil, 2021; Zucoloto & Koeller, 2022).

4. Analysis of Projects Contracted under Direct Grant Calls

Finep received more than two thousand proposals in the first round of direct grant calls. Of these, 151 projects were contracted, totaling approximately R$ 2 billion (around US$ 400,000) as of January 2026. These projects were submitted by 133 firms, which committed to investing approximately R$ 1.1 billion (approximately US$ 220,000) as financial counterpart contributions. The National Science, Technology, and Innovation Framework establishes the requirement for firm co-financing, allowing economic grant resources to be allocated to both operating (current) and capital expenditures.

Among the information on projects contracted under the economic grant calls of the Mais Inovação Program, the following stand out: the average implementation period, the average Finep funding amount, the average co-financing contribution, and the share of co-financing in total Finep funding (Table 1).

Projects related to Sustainable Agro-industrial Chains, Renewable Energy, and Health accounted for the highest number of contracted proposals, with 24 projects in each thematic area. In contrast, the approved projects with the highest average funding values corresponded to the themes of Sustainable Aviation, Sustainable Agro-industrial Chains, and Semiconductors, with the first two also among the calls with the largest availability of resources. Projects under the National Sovereignty and Defense call stood out both in terms of average Finep funding and average co-financing contributions, reflecting differences in the minimum and maximum grant amounts established across the calls.

Table 2 — Characteristics of projects contracted under the innovation grant calls of the Mais Inovação Program, Finep (2023–2025)

Source: Finep (2026), accessed on February 19, 2026. Available at http://download.finep.gov.br/Contratacao.xlsx. Values deflated using the IPCA (Dec. 2025 = 100). Prepared by the authors.

Notes: 1. Data extraction was conducted on February 19, 2026, with information last updated by Finep on February 18, 2026.

2. In all calls, the maximum project implementation period was set at 36 months, with the possibility of justified extension at Finep’s discretion. 

3. Amounts refer to contractual funding responsibilities of Finep and do not include CNPq scholarship resources. 

4. Co-financing contributions vary according to firm size (defined based on Gross Operating Revenue) and the type of arrangement, which may be either Simple or Network-based, as established in each call.

The analysis of the stipulated implementation period is important, as it may reflect the level of complexity involved in executing the approved projects. The maximum period established in the calls was 36 months. However, the average implementation period (in months) varied across calls. Projects related to National Sovereignty and Defense exhibited the longest average implementation periods, followed by projects in Health, Sustainable Aviation, Bioeconomy, Sustainable Agro-industrial Chains, and Digital Technologies. The Semiconductor call, in turn, presented the lowest average project implementation period among the approved proposals.

The average Finep funding amounts, which represent the resources under Finep’s responsibility as stipulated in the contracts, indicate the scale of the contracted projects. As previously noted, the literature on innovation grant contracts signed in earlier periods highlighted relatively low average values, suggesting a fragmentation of resources, whereas higher funding amounts would tend to be associated with projects of greater impact.

The requirement of minimum project values appears to have led to an increase in the average Finep funding contracted across these calls. Even so, there is notable heterogeneity in average values among them, ranging from R$ 6.6 million (approximately US$ 1,3 million) in projects funded under the Waste, Sanitation, and Affordable Housing call to R$ 26.5 million (around US$ 5,3 million) in the Sustainable Aviation call. The average value of the National Sovereignty and Defense call stands out (R$ 91.4 million, around US$ 18,2 million), reflecting the conditions of the call, which established minimum and maximum values significantly higher than those of the other programs (Table 1).

Co-financing, both in terms of its average value and its share relative to Finep funding, reflects the volume of resources allocated by firms to the projects, indicating the degree of private-sector mobilization induced by the innovation grant mechanism. Once again, Table 1 shows substantial heterogeneity in both dimensions. In terms of average co-financing value, amounts range from R$ 2.6 million (around US$ 520,000) in the Digital Technologies call to R$ 19 million (approximately US$ 3,8 million) in the Sustainable Aviation call.

With regard to the share of co-financing relative to total Finep funding, the Bioeconomy call stands out. Another relevant factor is the heterogeneity across calls, as some of them structure grants through network-based arrangements involving the participation of STIs and co-executing firms, which are subject to different co-financing requirements. Once again, the National Sovereignty and Defense call differs markedly from the others.

5. Challenges and Perspectives

The Mais Inovação Program, embedded within the NIB framework and aligned with the recovery of the FNDCT budget, appears to be contributing to an intensification of the use of innovation grants as an instrument of R&D and innovation policy in Brazil. In particular, in this first round, the grants followed a thematic design aligned with the strategic missions defined in the Industrial Policy Action Plan, and found resonance in the demand expressed by firms, with approximately two thousand project proposals submitted.

In a complementary development, in February 2026, a second round of calls was launched, providing for an additional allocation of more than R$ 2.5 billion (US$ 500,00) in innovation grants, in line with the increased share of resources allocated to this instrument within total FNDCT funding for 2026 (Figure 1). 

In this new round, additional resources will be directed to the areas of Health, Digital Technologies, Semiconductors, and Sustainable Agro-industrial Chains, which were already covered in the previous calls. In addition, new calls have been issued with expanded thematic scopes, including Sustainable Mobility, Circular Economy and Sustainable Cities, Mineral Transformation, Energy Transition, and Defense Industrial Base. These new calls will receive proposals on a rolling basis through August and September 2026.

The new round introduces mechanisms to reduce the regional concentration of innovation grant resources, both through a specific Innovation Grant call aimed at projects in the North, Northeast, and Central-West regions, and through the allocation of minimum funding shares for these regions in the remaining calls.

Future evaluations of the innovation grant instrument may further advance the analysis of this new round of the Mais Inovação Program calls and deepen the study of aspects identified in this analysis, such as project size (in terms of Finep funding amounts and co-financing contributions) and its relationship with sectors and the size of funded firms.

The opinions expressed in this publication are the sole responsibility of the authors and do not necessarily reflect the views of the Institute for Applied Economic Research or the Ministry of Planning and Budget.