The federal government will pay for $20 million worth of a $41.8 million initiative spearheaded by industry group Natural Products Canada to fund innovation-based companies, in a deal announced Thursday in Charlottetown, PEI.

The government spend comes via its Strategic Innovation Fund, which is meant to “attract and support high quality businesses” in Canada.

Natural Products Canada, or NPC, is a Charlottetown-based industry group created in 2015 to facilitate co-operative relationships between environmentally friendly chemical, manufacturing and bioscience companies.

“Innovation in natural products has significant potential to bring social and economic benefits to Canada through quality solutions that benefit people, animals and the planet,” said NPC CEO Shelley King in a press release.

“Natural Products Canada is pleased to partner with the Government of Canada to support the companies and researchers that are developing these solutions and the broader ecosystem that is facilitating bringing these innovations to market.”

In its press release, NPC said it has so far participated in about 800 research and development products and invested directly in 13 companies.

It plans to use the $41.8 million spend to grow its roster of member organizations to about 2,500, including by spending $11.2 million to directly fund research and development. The rest will be spent on “enabling” $28 million of programs to otherwise accelerate R&D activities in the natural products industry.

In March, NPC also announced the creation of its own early-stage investment fund, which is planned to have a value of about $50 million, with fundraising slated to be completed in the fall.

Dubbed NPC Ventures, the fund is meant to fill a gap in the investment landscape with its exclusive emphasis on early-stage Canadian companies developing innovative natural products that are biologically-based.

It is targeting between 16 and 20 investments ranging from $500,000 to $2.5 million in startups in the cleantech, ag-tech, biotech, human and animal health, and water tech sectors.