January 2022

A window of opportunity for the South Med region

to grow a thriving biotech economy through
entrepreneurship*
By Abdel Hamid Sherief

Author
Abd El Hamid Sherief is currently a Sustainable Development MSc. Graduate
Fellow at the American University in Cairo with a specialization in Green
Technologies. He has worked in the Oil & Gas sector both in local and
regional roles and is MCIPS certified in procurement & supply. He is also a
member in MedYCA Network (Mediterranean Youth for Climate Action),
launched by the Center for Mediterranean Integration, as well as SGAC Egypt
(Space Generation Advisory Council) and MVA Egypt (Moon Village
Association). His current research focuses on the usage of marine algae for
desalination brine remediation.

Executive Summary

South-Mediterranean countries are in need of increased economic diversification as a way to

create jobs and increase resilience to the volatile global economy. One path towards such
diversification is to enhance the entrepreneurial potential in STEM fields (science, technology,
engineering and mathematics) like green and blue biotechnology and their water-energy-food
applications. Globally, agricultural biotechnology (technologies used to modify living
organisms: plants, animals, and microorganisms), was valuated at 50.05 billion USD in 2019
with expectations of reaching 72.2 billion USD in 20241. Also, blue biotechnology (biotech
applications related to marine ecology and resources) within the European Union (EU) region
has witnessed investments of 336 million Euros in the period between 2014 and 20202. As
South Mediterranean countries enjoy a substantial coastal line; similar economic potential
can be harnessed. These two subcategories of biotechnologies can potentially provide
economic opportunities to South-Mediterranean countries especially if circular economy
entrepreneurship was encouraged and administrative procedures were streamlined.

This policy brief aims to show how the biotech sector, in its waste valorization and bio-blue
economy aspects, could thrive in the South-Med region if supported with appropriate policies
that are science-informed and empowering to entrepreneurial innovation allowing for a more
enabling startup ecosystem. The brief shows that while global competition may affect the
ability of South Mediterranean countries to pursue ambitious biotech industrialisation in

* This policy brief was peer reviewed by Dr. Maryse Louis, FEMISE.
1 Agricultural Biotechnology: Emerging Technologies and Global Markets

https://www.bccresearch.com/market-research/biotechnology/agricultural-biotechnology-markets-report.html
2 Doussineau, M., Gnamus, A., Gomez Prieto, J., Haarich, S. and Holstein, F., Smart Specialisation and Blue biotechnology in Europe,

EUR 30521 EN, Publications Office of the European Union, Luxembourg, 2020, ISBN 978-92-76-27753-8, doi:10.2760/19274,
JRC122818.

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highly technical medical fields, agricultural biotech and blue bio-economy entrepreneurship
could be easier to scale up; especially with rising global interest in regenerative / low impact
water-energy-food nexus solutions and carbon fixation. The brief provides insights of concern
to policy makers, based on the entrepreneurial experiences of three early-stage blue and agri-
biotech startups. Academic-industrial integration, administrative reform and synergetic links
with the emerging IT industry in South-Med region, are highlighted, among other parameters,
as policies in need of implementation. In addition, harnessing the power of North-South and
regional collaboration and the drive towards environmentally friendly businesses, could help
encourage the emergence of more bio-entrepreneurs in South-Med countries.

1. Introduction

Biotechnology3, as an economic sector, tends to thrive in countries with a strong scientific

research environment and robust and substantial capital markets, that would feature venture
capital firms willing to take risks on long-term investments such as biomedical trials or new
drug development. In developing countries, there is a high degree of dependence on
governmental resources for research and development (R&D) which are often limited due to
more pressing public spending needs. As a result, developing countries still need to develop
their own “niche” in biotech R&D segments given the limited technology availability and
funding. More specifically, green and blue biotechnologies could be potential segments for
South-Med countries.

While biotechnology seems to be popularly recognizable via medical and pharmaceutical

enterprises; its applications within the water-energy-food nexus and climate change are
increasingly explored. According to the OECD report on Industrial Technology & Climate
Change (2011), biotech applications could save humanity a collective of 1 to 2.5 billion tons
of carbon per year, by 20304. According to Global Markets Insights, the market size of
biotechnology was estimated to be 497 billion USD in 2020 with a forecasted growth rate of 9.
4% between 2021 and 20275. Since South Mediterranean countries have ratified the Paris
Accords on Climate Change, green biotech would help create economic value while
committing to climate change mitigation targets. In this sense, biotechnological applications
hold a lot of potentials for this region.

First, in terms of job creation, a research report (December 2020) shows that the EU region is
supported by 223,000 direct jobs due to biotech in addition to 710,000 indirect jobs within the
extended support services and supply/value chains6. Similar trends could be expected in South
Med region if this sector is provided with needed support.

Second, the pandemic didn’t only highlight the importance of establishing local biotech
capabilities in developing nations, but also underlined the need for the green transition as a
stimulus to the slumbering economy. Such drive isn’t only led by governments but corporates
as well, like Novo Nordisk, a major pharmaceutical company that has awarded more than 17

3 According to the revised definition of the Organization for Economic Co-Operation and Development (OECD) “is the application
of science and technology to living organisms, as well as parts, products and models thereof, to alter living or non-living materials
for the production of knowledge, goods and services” and the World Economic Forum refers to it as “A broad range of technologies
that employ living organisms or parts of them to make diverse products”.
4 Industrial Biotechnology and Climate Change https://www.oecd.org/sti/emerging-tech/49024032.pdf
5 https://www.gminsights.com/industry-analysis/biotechnology-market
6 https://www.europabio.org/wp-content/uploads/2021/02/201208_WifOR_EuropaBIO_Economic_Impact_Biotech_FINAL.pdf

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million USD in June 2021, via its foundation, to 12 different research projects in the fields of
green environmental and industrial biotech7.

Table 1. Exports of South-Med Countries The European Union Green Deal, endorsed in
with EU December 2019, would begin to have effects
on trading partners who don’t follow similar
South-Med Share of EU in trade
Country carbon taxation schemes as the EU via the
Table 1: Source European Commission “Carbon Border Adjustment Mechanism”
Tunisia 57.9 % (CBAM) as per the analysis carried out by the
Egypt 24.5 % Economic Research Forum (ERF)8. This shall
have great implications on South-
Morocco 56 % Mediterranean countries that rely on trade with
the EU as shown in the table 19.
Algeria 46.7 %
Lebanon 30.3% Thirdly, these sectors can provide an
opportunity to enhance North-South scientific
Libya 51 % biotech collaboration through EU funded
programs. For example, the Union for the
Jordan 14.7%
Mediterranean report of blue economy
projects10 estimates that the gross value
Source: European Commission.
https://ec.europa.eu/trade/policy/countries-and- added of bio-prospecting in European waters
regions/ to reach 1 billion Euro11.

Fourthly, biotechnology can provide solutions to waste management, not only via treatment
(like in composting waste / sludge for biogas), but also via producing materials of biological
origins
Table 1:that are bio-degradable,
Source or ones created via circular economy supply chains. A startup
European Commission
demonstrating such potential is Chitosan Egypt (which is supported by the EU-funded THE
NEXT SOCIETY initiative) that produces chitosan (a versatile bioactive polymer) through
recycling 500 tons of seafood waste yearly in Egypt12.

The brief features the experiences of three aspiring early-stage start-ups in the fields of agri-
biotech and blue biotech with policy making recommendation targeting the South-
Mediterranean region. The insights are necessary in providing some tools on how to support
and accelerate the commercialization of both agri and blue biotech research as it moves from
academia to industrial implementation.

2. Biotech Entrepreneurial scene in the South-Med region

The entrepreneurship in the South-Med region is still in its early stage. The entrepreneurial
youth deploy technology and maverick attitudes to find solutions to problems they face in
their societies. However, they are often faced with forms of economic governance that could
be cumbersome and inefficiently costly which leads to increasing economic development
barriers13. At the same time, the biotech sector requires substantial capital to move from the
research phase to the commercialization phase and hence additional costs and complicated

7 https://novonordiskfonden.dk/en/news/twelve-biotechnology-projects-boost-the-green-transition/
8 https://erf.org.eg/publications/potential-effects-of-the-eus-carbon-border-adjustment-mechanism-on-the-turkish-economy/
9 https://ec.europa.eu/trade/policy/countries-and-regions/
10 Such as bio-prospecting (searching for valuable biochemicals in nature) in the Mediterranean Sea (within aquatic organisms)

like ULIXES and the Mediterranean Science Commission (CIESM);

11 https://ufmsecretariat.org/wp-content/uploads/2017/12/UfMS_Blue-Economy_Report.pdf
12 https://www.thenextsociety.co/chitosan-

egypt#:~:text=Chitosan%20Egypt%20is%20specialized%20in,families%20in%20Fayoum%20whose%20only
13 https://www.weforum.org/agenda/2019/04/5-key-challenges-facing-the-mena-region-ahead-of-our-global-summit/

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administrative procedure could affect the business feasibility and discourage biotech
researchers to move to this next phase, which encounter losses for the sector.
More particularly, investment in start-ups shows a discrepancy across MENA countries
(Figure 1), which depends on the country’s wealth (petrol rich countries of the Gulf
Cooperation Council and others) and the population size (Egypt being the largest Arab
World/South Mediterranean country).
Figure 1. South Mediterranean countries startup investments vs. GCC countries in 2021 (in
Million USD)

Oman 3.6
Kuwait 39.3
Qatar 8.9
Bahrain 42.446
KSA 614.5
UAE 1366
Jordan 102.505
Palestine 0.24
Algeria 30.034
Lebanon 3.8
Tunisia 3.604
Morocco 21.308
Egypt 431.6

0 200 400 600 800 1000 1200 1400 1600

Source: Wamda and Digital Digest Monthly review

Table 2. startup categories raised funds in

2021
Moreover, investments towards relevant Percentage of
biotechnology sectors are still low in the Funds raised in
all MENA
MENA region compared ot other technology Category MENA in 2021
raised startup
sectors, such as foodtech, fintech and e- (in million USD)
investments
commerce (table 2)14. This clear bias Sectors that could benefit from biotech
towards non-biotech sectors could be due to Agritech 134.9 5.00%
several factors that favours investement in
Health tech 36.7 1.31%
these sectors, such as: 1) the lower costs of
prototyping and validation, 2) the presence of Clean tech 31.7 1.17%
sizeable population of programmers / Examples of other sectors receiving more
coders within the region and 3) their potential funding
of digital expansion and 4) the easier Foodtech 602.8 22.36%
procedures in terms of licensing. At the same Fintech 502.2 18.63%
time, the biotechnology sectors suffer from
E-Commerce 378.9 14.05%
complex procurement channels of input
materials that are imported, or limited in the Mobility 168.4 6.24%
local markets in the case of industrial Logistics 154.8 5.74%
processes and hence these biotech sectors Source: Wamda & the digital digest
don’t have the same flexibility and low input
costs as in other sectors.

14 https://www.wamda.com/2022/01/mena-startups-raised-206-million-december-2021

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3. Regenerative biotech in agriculture waste management and the blue
economy
While the MENA region as a whole generates an amount of waste than is almost equal to the
global average, some South-Med countries generate more waste per capita than both the
regional and global average (e.g. Algeria, Palestine, Lebanon)15, as shown in figure 3. It is also
to note that the lack of integrated waste management, constitutes both a lost economic
opportunity and an environmental/public hazard and exacerbate the negative
social/environmental consequences.

Figure 3. MENA Waste Generation rates

Figure 2: Waste Generation rates; MENA, 2016; Source: World Bank Report ‘What A
Waste, 20th of September 2018]

Source: World Bank Report ‘What A Waste, 2018

When it comes to blue biotech, the South Med region can benefit from its substantial access
to an extended coastal line (Morocco 2500, Algeria 1100, Tunisia 1148, Libya 1770, Egypt
2450, Gaza Strip 40, Lebanon 225 and Jordan 26 kilometers). Farming seaweed, other than
just harvesting from the wild, is of great importance for conservation, as seaweed fisheries in
the area are under threat of overharvesting.
In Morocco, for instance, where the seaweed sector earns the country 31 million Euro yearly
(as of 2014), the government had to place restrictions on removal of seaweed from its
national habitat due to the “Red Gold” rush of exporting red algae, with a yearly quota at 6040
tons as reported in 2014, which is a major reduction from the peak wild harvesting of 14,000
tons in 200916. With the increase in Moroccan fishing fleets (tripled since the 90s), the
government encourages shoreline aquaculture and the development of a strategy for a blue
economy initiative that is based on monitoring biodiversity, finding alternatives to dwindling
natural fisheries and aquaculture17. The Moroccan Blue Economy national initiative could
constitute a good best practice for potential similar seaweed biotech projects in other South
Mediterranean countries especially if integrated with the production of other seafood items
like clams / abalone and mollusk. Morocco managed to attract foreign investments in the
seaweed field with startups like the Dutch Seaweed Company that used a grant from the

15 https://openknowledge.worldbank.org/bitstream/handle/10986/30317/211329ov.pdf
16 https://english.alarabiya.net/life-style/travel-and-tourism/2014/09/10/Hard-times-for-red-gold-divers-in-Morocco-s-El-
Dorado
17 https://thearabweekly.com/aquaculture-offers-lifeline-foundering-moroccan-fishermen

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Netherlands Enterprise Agency (RVO) to cooperate with a local Moroccan cooperative;
employing 15 local farmers18.
The market size for carrageenan products (extracted from seaweed) in Africa and the Middle
East has been estimated at 80 million USD with expectations of reaching 100 million USD by
202119. They are important for the food and pharmaceutical industries and hence, local
demand in South Mediterranean countries is often met with imports.
Another motivation for this kind of enterprise is the number of generated jobs. The World Bank
estimates that one job could be created for each 10 ton of dry weight of farmed seaweed, and
with an additional sum of 500 million tons are produced yearly, 50 million more jobs would be
created globally20. This amount of additionally farmed seaweed could sequester around 135
million tons of carbon and create protein extracts of 50 million tons while producing biofuel
energy equivalent to 1.25 billion MWH, globally.
In addition, when it comes to blue biotech, regional cooperation can yield significant research
& development achievements, such as the MED-ALGAE project that encompassed at least two
South-Med countries, Egypt and Lebanon, besides Italy, Malta and Cyprus. The participating
Lebanese team won the 2016 National Energy Globe Award.21

4. Challenges facing the Biotech sector as voiced by interviewed

entrepreneurs
For the purpose of this study, three early-stage startups in green biotech sectors (waste
management of organic residue for agricultural biotech applications and blue bio-economy)
have been surveyed for firsthand accounts on the motivations behind establishing their
projects, challenges related to bio-entrepreneurship and how they overcame these challenges.

Project Link to academia Water-Energy- Products Impact of COVID-

Description Food nexus 19
applications
Novel The project’s Biochar, (the Several chemical As public
Treatment of research & residual high input feedstock awareness
agricultural / development is carbon material materials like increases
industrial bio- funded via the Furfural / Acetic regarding health
after pyrolysis of
waste using “Egyptian-Finnish Acid, hazards; waste
thermal academic project : organic material) Levoglucosan management
processing Plant Breeding, helps mend and became looked at
(Led by Dr. Genetics and saline soils; a methoxyphenol as an important
Magdy Biotechnology” condition that + biochar & aspect in fighting
Mohamed reduces feedstock oil. diseases, shedding
(Egypt) yield/cause crop light on the mission
of the project.
failure

18 https://www.government.nl/latest/news/2021/05/24/africa-business-week-pioneering-with-seaweed-in-morocco
19 https://www.marketdataforecast.com/market-reports/middle-east-and-africa-carrageenan-market
20 https://documents1.worldbank.org/curated/en/947831469090666344/pdf/107147-WP-REVISED-Seaweed-Aquaculture-

Web.pdf
21 http://www.enpicbcmed.eu/communication/lebanon-med-algae-project-wins-national-energy-globe-award

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 KN Marine for The project rallies Seaweed Agar, As seaweed could
seaweed the support of a farming doesn’t carotenoids, and be dried and stored
cultivation special-interest compete with biomass for till borders open up
(Algeria) (Led
club of marine limited fertile / processing and (for trade), or till
by Karima
Bougueroua) biology and arable land and refining. demand bounces
ecology volunteers scarce water back, seaweed
to help with resources cultivation process
seaweed irrigating crops to be an industry
collection, that is agile and
cataloguing and resilient towards
sorting; such club shocks like the
has academic ties. pandemic.

Algaenoor: The project’s The project Beta Carotene, Delayed research &
growing experimental trials utilises protein meal, development due
microalgae are conducted as desalination lipids (refined to lockdown
part of the brine to produce into biodiesel), restricting access
using
Sustainable valuable glycerol; brine to laboratories.
desalination Development biomass for food bio-remediation Used lockdown
brine (Egypt) Program at the /feed, biofuel and carbon time for refining
(Led by Abd El American and brine fixation. the business model
Hamid Sherief ) University in Cairo remediation; via program like
using algae salt GIMED /
uptake potential INVESTMED and
Berrytech
Go2Market.

4.1. Startup 1: Novel treatment of agricultural/ industrial bio-waste using thermal processing
(Egypt)
Set in the field of green technology, this project tackles bio-based agricultural and industrial
waste to produce agrochemicals/ soil enhancers like biochar, bio-pesticides and other high
value feedstock chemical ingredients via the pyrolysis process. Aside from profitability, due
to how congested the countryside could be, the storage of agricultural waste on land creates
a suitable environment for pests that pose a risk to humans, livestock and the next crop cycle.
According to some studies, agricultural waste left in the open releases a CO2 carbon
equivalent at the rate of 1 ton against every ton of organic waste left to decompose with the
IPCC report showing that 3% of human emissions coming from decomposed organic waste22.
Also, burning residual waste like rice straw releases 7300 kilograms of CO2 equivalent per
hectare per year23. This project is enabled by the Egyptian-Finnish research collaboration and
has been motivated by Egypt’s significant amounts of generated agricultural waste each year
that could benefit from the innovation achieved by this pilot project.
The key reported challenges are:
 Securing initial funding has been cited as a major obstacle despite the promise of
high returns. As per the principle investigator’s calculations, assuming the utilization
of just 55,000 tons per year of agricultural waste, the project could generate a net profit
before tax of 1,532,500 EGP (85,000 Euro) just from the sale of biochar and substantial
sales revenue from bio-pesticides reaching 73,490,000 EGP (around 4 million Euro).
The initial costs of the pyrolysis reactor itself can be significant as seen in a

22 https://www.agric.wa.gov.au/climate-change/composting-avoid-methane-production
23 https://www.sciencedirect.com/science/article/abs/pii/S0048969721009633

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 comparable study conducted in KSA where the capital costs of the initial setup were
estimated at 2 million USD (around 1.75 million Euro) without consideration for land
lease, or initial purchase of agricultural waste to start the production cycle and only at
the limited capacity of 10 ton per day)24.
 Academic R&D budget is not sufficient for scaling up: The trials relied on the Egyptian-
Finnish Research collaboration whose grant was also used to update the laboratories
of the FCRI and ARC research centers. Academic grants are often limited in scope /
monetary allowances / grant duration so the academic researcher investigating the
commercialization of the project would have to adopt a “do it yourself” attitude to
reduce the overall budget. This could have a negative effective and demoralizes this
emerging class of researchers-turned entrepreneurs. Despite the lack of funds, the
team managed to validate their business model as the produced biochar was tested
by 218 farmers and the project received queries from 1,000 farmers who were
interested in mending their land soil due to the increasing salinity levels.
 Supply chain issues: The research project recommended the inclusion of community
stakeholders, governmental and NGOs so that a robust system for communicating
findings and closing the supply and value chains from collected waste to final
products, bio-based pesticides and herbicides as well as valuable chemicals.
Fragmented and unreliable agricultural waste streams that don’t follow a standardised
system for collection impacts the possibility of building a business model since input
materials (agricultural / industrial waste) are hard to quantify, or predict (in addition to
fluctuations in amounts and grade).
 Lack of public investments in R&D: The project team emphasised the need for
investment in research & development as a legitimate expenditure from the public
budget. This is hard to envision at a time when many countries within the Middle East
witness governmental gradual withdrawal from public sector spending. Most South-
Med countries have low % of GDP allocated to scientific research (Algeria: 0.1%, Egypt:
0.6%, Jordan 0.4%, Morocco 0.7%, Palestine 0.5%, Tunisia 0.7%)25 and Lebanon26 0.2%
at a time the world average in 2018 is 2.2%27
4.2. Startup 2: The Blue bio-economy (KN Marine, project led by Karima Bougueroua , Algeria)
As Algeria’s unemployment rate reached 12.83% in 202028; creating jobs via the blue bio-
economy is needed. KN marine estimates the potential of 100 million USD by 2030 to be
earned from the developed seaweed sector with created job opportunities to 1,200 workers.
The team witnessed the following hurdles:
 There are no policy frameworks for managing an integrated “blue economy” system.
This creates territorial conflicts over suitable areas for seaweed farming in
competition with fishing fleets. Establishing a cooperative-based framework would
allow synergetic coexistence between seaweed cultivation and the fishing industry in
a way that would boost fish stock yield and increase biodiversity.
 There is a problem with lacking the necessary supplies related to such industry;
including the laboratory infrastructure for propagation of the seaweed. That is
particularly felt within segments of the project that integrate aquaculture systems.
 Bureaucracy and restrictive governmental rules have affected the ability of the team
to attract foreign investments. Foreign investors find it hard to penetrate the Algerian
market due to protectionist laws like the 2009 regulation mandating companies to
have minimum “51%” of any established joint venture in Algeria of strategic

24 https://www.mdpi.com/1996-1073/14/19/6048/htm
25 http://uis.unesco.org/apps/visualisations/research-and-development-spending/
26 https://www.orientation94.org/uploaded/MakalatPdf/warakat%203mal/fhomeidan.pdf
27 https://data.worldbank.org/indicator/GB.XPD.RSDV.GD.ZS
28 https://www.statista.com/statistics/408055/unemployment-rate-in-algeria/

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 importance29; since such ruling is applied across different economic sectors, it affects
the ability of biotech startups to initiate technology transfer into the country via
partnerships with international companies that would prefer keeping a controlling
stake in the company, or investing via an international consortium of financiers, further
fragmenting the total shares.

The startup tried to address those challenges with the following actions
 Examining the proposals for aquaculture enterprise support and submitting them to
the government suggesting administrative reform via holding meetings with the
Ministry of Fisheries to “pitch” the value proposition of seaweed cultivation in future
climate-adapted food and aquaculture systems. Many of South-Med countries may
have startup support schemes, but they are often not properly communicated, or
accessible or too time / resource consuming, so such dialogue is needed.
 Discussions with the Ministry of Fisheries and Fish Resources propelled the
development of joint public-private communication proposals to develop reports on
how the regulatory code can be streamlined, simplified and cleared to support
logistics, processing and marketing locally/abroad. Inclusion of governmental entities
like CNRDPA Algeria (Centre National de Recherche en Pêche et Aquaculture: National
Center for Research in Fisheries and Aquaculture) is needed for advising policies
based on quantitative / qualitative evidence.

THE NEXT SOCIETY initiative supported KN Marine, via the Tech Boost Bootcamp and
Tek2HUB Program implemented by Algerian consultancy Brenco: the team participated in a
bootcamp which included training on funding and business model development as well as
intellectual property management including planning the R&D work towards patenting.
4.3. Startup 3: Algaenoor, Microalgae potential in bioremediation of desalination brine
(Egypt)
Under the blue technology sector, Algaenoor, an early-stage startup still at the R&D phase,
aims at using the salt uptake properties of algae like D. Salina for the remediation of
desalination brine. By 2022, Egypt could produce 550,000 to 825,00030 cubic meters of
desalination brine per day and by 2050, the amount of brine shall reach between 6.4 and 9.6
million cubic meters per day31. Desalination brine is used as a resource rather than a toxic
waste to produce high value molecules: beta carotene, lipids and high protein meal. In
addition, algae extracts could be used as fertiliser / soil enhancer to increase crop tolerance
to salinity. The startup team indicated that a 20-acre algae farm could fix 19,170 tons of CO2
and produce 29.6 tons of beta carotene with 1800 gallons of biodiesel per acre per year and
4-15 tons of protein per hectare per year more.
Challenges listed by the startup team:
 Governmental regulations restrict access to important supplies necessary for R&D
(like some Nitrogen compounds) affecting production efficiency optimization. Also,
governmental permits for marine projects, are very difficult to secure.
 The trial funds secured via university, namely the American University in Cairo & Heriot
Watt University (United Kingdom) only allow to cover lab scale; while
commercialization attempts would require full scale pilot demonstration that could be
costly (5 million EGP; around 278 thousand Euros).

29 As highligted by Doug Wallace, the US Commercial Attache to North Africa and Pierre Gattaz, from Radiall French Electronics
Co: https://apnews.com/article/bfd6c17b6eb54edea55b666fb64b535b
30 https://www.egypttoday.com/Article/1/91123/Egypt-to-complete-19-desalination-plants-within-18-months
31 https://www.reuters.com/world/africa/water-poor-egypt-eyes-quadrupling-desalination-capacity-5-years-2021-10-

21/#:~:text=Egypt%20now%20has%20installed%20desalination,to%20figures%20from%20the%20fund.

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  MENA startup scene in general is less courageous about biotech ideas as they are
deemed to have high initial capital investments and high risks of the produced
chemicals not being able to compete with the quality grade of imported items.
 The presence of customs / duties and fees onto lab equipment makes industrial R&D
very expensive. This creates a backlog of delayed lab tests as lots of researchers have
to depend on a few central labs (that could afford lab equipment).
 There are few marine biology labs dedicated for algae cultivation and academic
studies are more confined to surveying local marine flora rather than production.
 Startup accelerators require a minimum viable product (MVP) and algae-based MVP
is costly to develop.

How the team tackled those challenges?

 Trying to find substitutes of restricted chemicals, like utilising agricultural fertilisers to

compensate the need for lab-grade nitrates. Also, engineering school connections
helped with procuring samples from a desalination plant for testing with plants to
benefit from the USAID Centre of Excellence of Water Research and the International
Water Management Institute to help with permits/ approvals.
 New design consideration for the MVP is being considered so that a pilot
demonstration could be developed at much lower cost.

Conclusion and Policy Recommendation

While global competition may affect the ability of South Mediterranean countries to pursue
ambitious biotech industrialisation in highly technical medical fields, agricultural biotech and
blue bio-economy entrepreneurship could be easier to scale up; especially with rising global
interest in regenerative / low impact water-energy-food nexus solutions and carbon fixation.
Bridging the gap between academia and industrial implementation seems to be a recurring
theme among the three surveyed early stage startups in addition to the need for governmental
administrative process simplification as well as formulating policies to be evidence and
science based.

Designing policies, to be based on science and public-private partnerships, should be a major

key performance indicator for local governments that may utilise carbon credit trading
schemes as a way to finance regenerative biotech enterprises. Reducing research cost and
barriers of commercialisation via multidisciplinary integration with information tech /
business programs and value chain consolidation, would be needed.

While global competition may affect the ability of South Mediterranean countries to pursue
ambitious biotech industrialisation in highly technical medical fields, agricultural biotech and
blue bio-economy entrepreneurship could be easier to scale up; especially with rising global
interest in regenerative / low impact water-energy-food nexus solutions and carbon fixation.
Bridging the gap between academia and industrial implementation seems to be a recurring
theme among the three surveyed early stage startups in addition to the need for governmental
administrative process simplification as well as formulating policies to be evidence and
science based.

Designing policies, to be based on science and public-private partnerships, should be a major

key performance indicator for local governments that may utilise carbon credit trading
schemes as a way to finance regenerative biotech enterprises. Reducing research cost and

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barriers of commercialisation via multidisciplinary integration with information tech /
business programs and value chain consolidation, would be needed.

Policy recommendations for agricultural biotech

Biotech projects tackling climate change / water scarcity resilience, shall be strategically
linked to existing governmental assets within rural communities; like agricultural cooperatives
that could be hub locations for distributing biotech products/ receipt of input ingredients
(agricultural waste). This closes the circular economy loop in areas like Nile Delta where 33%
of the soil is degraded and bio-additives are needed to mend it.

Biotech projects producing low-carbon / carbon-neutral solutions, shall apply for carbon
accreditation / attestation schemes that allows biotech-entrepreneurs to generate revenue
against sequestered carbon at the time when MENA region is witnessing the emergence of
voluntary carbon trading platforms (like in UAE and KSA).

Synergising the work of biotech entrepreneurs with agri-biotech companies that utilise
sensors, GIS (Geographical Information Systems), and crop automated systems, could
improve the commercial viability to the bio-agrochemical markets with consolidated supply
chains. Same with agri-biotech mobile applications featuring platforms of subscribers /
service users. An example could be seen in Tunisian agri-biotech startup “Ezzayra” that could
increase the yield and profitability of the agricultural process by 30% via their integrated farm
management system as indicated by Yasser Bououd; one of its founders32.

Contracting & Procurement departments assigned to major desert reclamation projects shall
have “local content” policies that encourage tendering processes that include and encompass
agri-biotech startups and small-medium enterprises.

Policy recommendations for blue-biotech

There is a need for establishing national centers of research excellence on algae with a focus
on commercialisation of research findings and improving the local “technology readiness”
levels. In addition, dedicated startup incubator programs, attached to universities, should
provide prototyping support (lab space/ materials) to biotech proposals to ease the costs of
MVP development and would link up business / economic researchers / students with biotech
/ STEM innovators. Such “bio-parks” could be designated as “free zones” where customs and
tax exemptions are enjoyed.

Regional cooperative protocols, possibly sponsored by organisations like the Arab league can
disseminate experiences and lessons learnt in fishery management and integrating seaweed
cultivation programs. Such programs could aspire to have accreditation programs for “blue
carbon offsets” that could help finance startups and SMEs.

Time-value studies of governmental policies and administrative procedures are needed for
business setup permits, both terrestrial (shoreline) and at sea. Such studies should reveal the
redundancy in approval procedures and lead to a public governance “lean” six-sigma
streamlining project especially in countries where approvals need to be acquired from two
bodies of government; military (navy) and civil (municipality). Permitting could help
synchronise seaweed cultivation to alternate with fishing /spawning months, reducing coastal
“seasonal poverty” and ensuring the replenishment of natural fisheries.

32 https://worldcrunch.com/tech-science/in-tunisia-a-digital-revolution-for-agriculture-takes-root

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Central planners should advise power and desalination plants to follow a hybrid design that
facilitates capturing carbon for injection into brine ponds used for algae cultivation with such
emission offset opportunities to be highlighted in environmental impact assessment (EIA)
studies.

Blue biotech could help the mature oil & gas sector in South-Med countries to address green
transition requirements via biofuel divisions where chemical refinement is passed on to algae
biofuel production (biodiesel / bio-hydrogen) not only via sponsoring innovation challenges
(as corporate social responsibility), but as co-investors.

Repurposing degraded lands (no longer arable) as well as blocked/neglected irrigation canals
in South-Med rural regions, could allow for low-cost inland algae cultivation. In addition, inland
aquaculture farms that suffer from a supply glut (with reduced prices), aquaculture farms
could be easily converted to grow algae especially in months where the fish cycle is disrupted
by extreme heat waves, or extreme cold (there are marine algae species that withstand both;
allowing infrastructure usage year round).

There is a need to allocate a subsidy program to local producers of algae-based protein

replacements of imported soy, corn, barley, or other feed grains besides establishing local
commodity markets for innovative local feed for mass adoption.

There is a global interest in water-energy-food nexus innovation as well as opportunities to

develop carbon mitigation / fixation targets with much more targeted and focused investment
appetite than local financiers. Hence, supporting initiatives like THE NEXT SOCIETY can help
with connecting local innovators with international venture capital firms interested in
establishing presence in emerging economies and developing countries (such as the likes of
Y Combinator).

EU Horizon Program for research collaboration already benefits researchers within Sub-
Mediterranean countries especially in areas like the water-energy-food nexus and at the same
time, EU funds startup incubation programs, like THE NEXT SOCIETY Program and others like
GIMED / INVESTMED, so synergies between the two could be cultivated, where R&D work
carried out within the Horizon program could immediately be placed onto a “commercialization
track” within incubation and acceleration programs for a faster academia-industrial linkage.

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Entrepreneurs who participated in this study

Karima Bougueroua – KN Marine, Algeria

Passionate about nutrition, Karima Bougueroua is a PhD student in

physiology of nutrition and health and CEO of KNMarine. She is very
interested in the seaweeds. KNMARINE is an innovative economic
project that aims to exploit the marine resources of Algeria. The
industry is based on technology that is the most modern language
because it can improve the country's competitiveness through its triple
efficiency.

Magdy Maher – Novel Agro-technological Approaches for Transforming

Agriculture and Industrial Bio-wastes into Bio-products, Egypt
Dr. Magdy Maher Mosad Mohamed is the principal investigator of the
“Novel Agro-technological Approaches for Transforming Agriculture
and Industrial Bio-wastes into Bio-products” project. Dr. Magdy M. M.
Mohamed got the “World's Best Teacher and World's Best Boss” at the
“Biochar Systems for Africa International Workshop” held in Kenya in
2016. His project aims to improve the management of biowaste in
Egypt and thereby reduce its potential negative impacts on human and
animal health, the environment and the economy.

Abd El Hamid Sherief – Algeanoor, Egypt

Abd El Hamid Sherief is the founder of Algeanoor. He is currently a

Sustainable Development MSc. Graduate Fellow at the American
University in Cairo with a specialization in Green Technologies. Abd El
Hami has a bachelor in Accounting (Business Finance) also from the
American University in Cairo and minor courses in architecture in
addition to a diploma in environmental engineering.

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This Policy Brief has been produced with the financial support of the European Union. The contents of
this brief are the sole responsibility of « the authors » and can under no circumstances be regarded as
reflecting the position of the European Union.

This Policy Brief is produced as part of the series of Policy Briefs on « Entrepreneurship in the South
Mediterranean Region » that is undertaken in partnership between FEMISE and ANIMA Investment
Network through THE NEXT SOCIETY Project.

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network gathering more than 100 research and economic development
members of economic research hubs from Europe and 7 Mediterranean
institutes from the North and South of the
countries: Algeria, Egypt, Jordan,
Mediterranean.
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