Perú: Reserva Ecológica Inkaterra

Implementation Plan

Project Management and Administration
All of the GEF-funded activities will be spearheaded by ITA. ITA will be responsible for implementing the forest conservation, community development, and environmental education activities described above. It will do this in conjunction with local partners such as ACEER. ITA will also be responsible for overseeing the construction of the new ecotourism attractions. It will do this by contracting Canopy Access Providers, an organization that specializes in canopy walks. ITA will possess adequate staff to implement this project. ITA’s General Manager (José Purisaca) has more than 20 years of experience with regard to biodiversity conservation in Peru. ITA will also hire a highly capable Project Leader in Puerto Maldonado to oversee individuals in charge of each program component. It will not be difficult for ITA to find well qualified, dedicated individuals to implement each aspect of this project. Indeed, ITA has proven itself quite capable of doing so while executing the PDF-A activities associated with this proposal.

Innovative Partnership

As part of the development of this project, ITA established a formal partnership with Palma Real (owner of the Reserva Amazónica lodge). In fact, it has been codified in a legal agreement between these two entities. This agreement stipulates that each party will fulfill the following responsibilities:

ITA’s responsibilities:

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  ITA will give marketing exclusivity to ITP for the four new ecotourism attractions. In other words, ITP will have the sole right to collect fees for their usage (which in turn will be shared with ITA).
  

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  ITA will also be responsible for monitoring the new ecotourism activities to ensure that they do not generate any significant environmental impacts.
  

Palma Real’s responsibilities:

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  Palma Real will market the new ecotourism attractions through its website and extensive network of tour operators. Palma Real will bear all of the associated costs.
  

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  Palma Real will operate and maintain the new ecotourism attractions. It will do so at its own expense and in accordance with environmental guidelines stipulated by ITA.
  

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  Palma Real will give 20% of its revenues to ITA. This will be subject to a minimum annual payment (“floor”) of US$132,000 to help ensure that ITA has sufficient revenue to cover its basic costs of managing the reserve and working with the local communities.⁹ In exchange for accepting this downside risk, Palma Real’s payments will be capped at a maximum annual value (“ceiling”) of US$400,000.¹⁰
  

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  Over the first four years Palma Real will provide in-kind resources worth approximately US$104,000 in order to help cover ITA’s operating costs. This will broken down as follows: US$56,466 in year 1, US$28,000 in year 2, US$10,000 in year 3, and US$10,000 in year 4. The in-kind contributions will include food, transportation, and lodging.
  

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  Palma Real will maintain appropriate insurance to cover accidents or damages that tourists or visitors may suffer while visiting facilities owned by ITA or Palma Real.
  

Financing Plan

The GEF funds being requested for this MSP will be channelled to ITA as a grant and a concessional loan:

The grant will amount to US$386,757 (including US$25,000 already provided for project preparation). It will help to cover the costs associated with forest management, community development, and environmental education. Some of the grant will also help cover ITA’s administrative expenses during the first few years of the project. By year 4, the revenues catalysed by the new ecotourism attractions should allow ITA to become self-financing.
The loan will amount to US$363,243¹¹ and will cover the costs of installing the four new ecotourism products (except for the Giant River Otter Tour, which will be established in Year 2 based upon revenues earned by ITA in Year 1).¹² The loan will include a grace period during the four years of project implementation. The repayment period will begin immediately thereafter and will last for six years. The loan will be repaid in twelve equal instalments. There will be no additional incentives or disincentives with regard to pre-payment of the loan. It will be denominated in US dollars. Because Inka Terra’s invoices are also denominated in US dollars, there will be essentially no foreign exchange risk.
The loan will include 3.0% interest. After estimating future cash flows and conducting sensitivity analyses, it was determined that 3% is the maximum interest rate that could be stipulated without unduly compromising ITA’s ability to cover the ongoing costs of managing the reserve. ITA would not be able to afford the 18% interest that banks currently charge in Peru.
Implementation Schedule

	Year 1	Year 2	Year 3	Year 4
Business Expansion
Expansion of Existing Hotel Facilities	X
Establishment of New Facilities		X	X	X
Forest Management
Forest Characterization & Zoning	X
Drafting of Management Plan	X
Biodiversity Inventory	X	X	X	X
Community Partnerships for Conservation & Development
Sustainable Agriculture Promotion	X	X	X	X
Reforestation Program	X	X	X	X
Fish Farming	X	X	X	X
Animal Breeding	X	X	X	X
Community Development Fund		X	X	X
Contingency Fund				X
Ecotourism Development
Palm Forest Observation Walk	X
Canopy Walk	X
Primate Rescue Center	X
Giant Otter Observation Tour		X
Environmental Training
Forest Conservation & Sustainable Use Training Program	X	X	X	X
Ecotourism Training Program			X	X
Park Ranger Training Program			X	X
Educational Campaign on Mercury & Mining			X	X
Monitoring and Evaluation
ITA & IFC Monitoring of Envtl, Social & Financial Indicators	X	X	X	X
External Evaluations	X	X	X	X