Perú: Reserva Ecológica Inkaterra



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29868

INKA TERRA:
An Innovative Partnership for Self-Financing

Biodiversity Conservation & Community Development




A Medium Sized Project Proposal

from the International Finance Corporation

to the Global Environment Facility


OCTOBER 2003
Table of Contents




Project Summary 2

Project Rationale & Objectives 17

Globally Significant Biodiversity Conservation 18

Baseline Situation 19

Road Construction 19

Logging 20

Hunting and Fishing 20

Mining 20

Ecotourism 21



Ecotourism Market Assessment 21

Expected Outcomes 22

Forest Conservation and Management Plan 22

Community Partnerships for Forest Conservation & Sustainable Development 22

Environmental Training 23

Long-Term Conservation Finance through Ecotourism Development 23

Project Activities 23

Business Expansion 23

Forest Management and Conservation Plan 24

Community Partnerships for Conservation & Development 24

Long-Term Conservation Finance through Ecotourism Development 25

Education and Training 26



Implementation Plan 27

Innovative Partnership 27

Financing Plan 28

Sustainability Analysis 29

Environmental Sustainability 29

Social Sustainability 29

Institutional Sustainability 30



Financial Sustainability 30

Risk Assessment 31

Stakeholder Participation 32

Incremental Cost Assessment 33

Budget 34

Monitoring & Evaluation 34

Replication 35

ITA Cash Flow Projections 36

Annex 1: ITA’s Organizational Structure 37


Project Summary





Project Identifiers

  1. Project Name:

Inka Terra: An Innovative Partnership for Self-Financing Biodiversity Conservation & Community Development

  1. GEF Implementation Agency:

World Bank (IFC)


  1. Host Country: Peru

  1. Country Eligibility:

Peru ratified the Convention on Biological Diversity on March 12, 1993.


  1. GEF focal area(s):

Biodiversity

  1. Operational program:

Operational Program # 3: Forest Ecosystems

  1. Linkage of the Project and national priorities, action plans and programs

The project helps to achieve Peru's objectives related to biodiversity as articulated in “The Law on the Conservation and Sustainable Use of Biodiversity.” Specifically, the project is aligned with Articles 3 and 5, which state Peru’s desire to: (i) foster education, information exchange, human resource development, and scientific research concerning biodiversity and the sustainable use of its components; (ii) promote economic development based on the sustainable use of biodiversity by encouraging private sector involvement; and (iii) generate funding mechanisms in order to adequately manage biodiversity.
The project is also fully consistent with Peru’s National Strategy for Biological Diversity. This Strategy specifies the development of sustainable uses of biodiversity as a national priority. In fact, one of its specific objectives is to promote sustainable tourism. The document indicates that the Peruvian Government seeks to ensure that tourism operators have incentives to promote conservation. It also seeks to foster nature-based tourism that is carried out with appropriate management plans, both in and around protected areas. In addition, the Strategy specifies that the Peruvian government will seeks to promote the granting of long-term concessions to tourism operators so that they are able to manage and protect natural areas.
Peru’s Flora and Fauna Act of 2000 provides a legal basis for granting long-term forest concessions for ecotourism purposes. This law specifies that ecotourism operators may obtain the legal right to manage natural areas of up to 10,000 hectares for 40 years. It specifies the procedures for obtaining such a concession, the responsibilities that it entails, and the instances in which concessions may be revoked. This project will help to pioneer the implementation of this legislation.
In 1998, Peru’s National Environment Council (CONAM) sponsored a Sustainable Tourism Roundtable that recommended the promotion of ecotourism as a vehicle for biodiversity conservation. In October 2000, the Ministry of Tourism stated that a major strategic direction of its tourism planning will focus on the promotion and development of eco-tourism. In 2001, the President of Peru issued a decree that specifies the basic characteristics and offerings that tourism operators should have in order to be classified as “ecotourism” facilities. At present, PromPeru (a government agency that promotes tourism) is carrying out a large-scale public relations campaign In various countries, including the Unites States, in order to increase tourism visitation to Peru. PromPeru is focusing heavily on the promotion of ecotourism. Beyond that, considerable efforts on the part of the local government and other stakeholders are now being focused on promoting ecotourism speficically in the state of Madre de Dios – where this project will be located – because it generates economic benefits with less environmental impacts than other industries.


  1. GEF National Focal Point and endorsement date of the Project:

Mariano Castro, Executive Secretary of the National Environment Council (CONAM), endorsed this proposal on February 14, 2001.

Project Objective, Outcomes and Activities

9. Project Objective:

Indicators:

To catalyse self-financing uses of the 10,000 hectare Inka Terra Ecological Reserve (IER) that achieve biodiversity conservation and sustainable development for local communities. This is expected to provide a replicable model for engaging the private sector in achieving financial sustainability for protected areas.







  • Elimination of logging

  • Reduction in hunting and poaching to sustainable levels

  • Increase in population of endangered species.

  • Increase in community involvement in conservation-compatible livelihoods

  • Increase in revenues available for biodiversity conservation & community development.




10. Project Outcomes




Business Expansion

Inka Terra will significantly augment its product range by expanding its existing facilities and developing new hotels in Cusco (the gateway city to Machu Picchu) and Puno (on Lake Titicaca).

  • Quarterly reports submitted by Inka Terra to IFC will indicate progress on construction and commercialisation of new & expanded facilities




Forest Management

The Forest Management and Conservation Plan is developed and implemented through local, national and international alliances.

  • Forest characterization document describes the detailed characteristics of the forest.

  • Forest conservation activities are carried out with support of local inhabitants, local institutions (FADEMAD and FEDAMAD), national entities (the Ministry of Agriculture, Mining, Tourism and Fisheries) and international organizations (CI, ACEER, etc.)




Community Partnerships

Effective partnerships are established between ITA and the four communities located in and around the IER. These partnerships will allow the local communities to become allies in helping to preserve the IER in exchange for various forms of technical assistance.

  • 50% of the families and 100% of the organizations of the 4 communities are anticipated to participate in community development & conservation efforts.

  • Level of technical assistance provided by ITA

  • # of agricultural ecosystem techniques being applied in 4 communities.

  • Feedback from community members

Ecotourism Development

ITA develops new eco-tourism attractions that generate long-term revenues for forest conservation and community development

  • # of new eco-tourism products implemented

  • Level of profits generated

Environmental Training

Training for local communities and other local stakeholders with regard to forest management, sustainable use, and ecotourism.

  • # of people receiving training

  • Feedback from community members




11. Project Activities




Business Expansion

Expansion of Machu Picchu Pueblo Hotel and Reserva Amazónica lodge, and development of two new hotels in Cusco and Puno

  • Quarterly reports submitted to IFC

Forest Management

Forest reserve is characterized and zoned using Geographic Information Systems (GIS)

  • Forest categorization document is produced.

Endemic forest species are inventoried, including their potential uses

  • The database of endangered flora and fauna is established.

  • A catalogue of current and potential uses of flora and fauna is produced.

Community Partnerships

Formal agreements are reached with 4 communities concerning the use and conservation of the forest (including hunting, fishing, and tree cutting).

  • # of agreements established

  • # of people participating

Programs are developed with 4 local communities to promote crop rotation, natural pest control, soil management, and drainage techniques to avoid damage from flooding

  • # of people participating in program

  • Community feedback




Eight native tree nurseries are established to repopulate the IER with species that have been depleted

  • # trees successfully replanted

  • Community feedback

Eight small-scale fish aquaculture operations are established (2 per community) to supplement local consumption and provide income

  • # of fish produced

  • amount of income generated




Animal breeding programs, including chickens, ducks, capybaras peccaries, will be established in each community for local consumption

  • # animals bred

  • Community feedback

A Community Fund will be established to finance small-scale community development projects proposed and executed by the local inhabitants

  • # of small scale projects financed

  • Evaluation results of community-based projects

A Contingency Fund will be established to assist communities if/when they experience extraordinary hardships from flooding or other adverse climatic events

  • Amount of funds made available

  • Community feedback

Ecotourism Development

Four new eco-tourism attractions will be developed: Palm Forest Walk, Canopy Walk, Primate Rescue Center, and Giant Otter Observation.

  • New eco-tourism products are constructed and operational

  • Amount of profits generated

Environmental Training

At least four workshops on forest conservation and sustainable use will be held each year for local people (including women and youth) from groups that constitute both opportunities and threats for forest conservation (e.g., colonists, loggers, teachers, unions, public officials).

  • Reports on workshop results

  • Participant feedback

A special training center will be set up for ecotourism operators and guides

  • # of individuals receiving training

  • Participant feedback

A mining campaign will be undertaken to create awareness about the detrimental effects of mercury and to promote alternatives that reduce impacts


  • # of individuals who learn about the deleterious effects of mercury

  • # of gold miners who improve their practices

12. Estimated Budget (in US$)



Project Preparation:

GEF: $ 25,000 PDF-A

Co-financing: $ 65,518 José Koechlin (cash)

TOTAL: $ 90,518


Project Implementation:

GEF Grant: $ 361,757

GEF Loan: $ 363,243

TOTAL GEF: $ 725,000


Co-financing: $ 5,103,465 Inka Terra (cash and in kind)

$ 187,000 ACEER (cash)

$ 90,000 Missouri Botanical Gardens (cash)

$ 919,601 ITA (cash)

$ 5,000,000 IFC (loan)

TOTAL: $ 11,300,066


GRAND TOTAL: $ 12,115,584



Information on Institution Submitting Project Brief

13.   Information on Project Proposer

This project has been developed and will be implemented by the Inka Terra Association (ITA), a not-for-profit, nongovernmental organization that aims to conserve and sustainably utilize biodiversity in Peru in conjunction with the local ecotourism company Inka Terra Peru (ITP). Although ITA is a relatively new organization, it contains highly capable and dedicated staff who have been working on biodiversity conservation in Peru for many years. The staff members have undertaken various conservation projects in conjunction with the Missouri Botanical Garden. These have included, for example, an orchid conservation project (which has been in operation since 1989), and a reforestation of the “cock of the rock” habitat (which has been in operation since 1983). ITA staff members have also implemented a conservation project for the spectacled bear (which has been in operation since 2000) and collaborated on a biological research project with the University of Kansas, which was financed by the National Geographic Society.


ITP has a long track record of promoting successful ecotourism in Peru. Since ITP began in 1976, it has grown into a multi-million dollar company that currently owns and operates a major eco-lodge located near Machu Picchu. ITP also has a wholly-owned subsidiary called Palma Real which operates an ecolodge called Reserva Amazónica (formerly Cusco Amazonico). Located in the Madre de Dios region of southeastern Peru, Reserva Amazónica is situated within a 10,000 hectare biological reserve (known as the Inka Terra Ecological Reserve), for which the company has a private concession.

ITA and ITP have been spearheaded by Mr. José Koechlin, a well-known leader of eco-tourism and biodiversity conservation in Peru. Mr. Koechlin is an Emeritus Board Member of Conservation International. Working through private sector business associations, Mr. Koechlin has encouraged the Peruvian government to pass laws for the development and promotion of sustainable tourism in Peru. And through his efforts with ITP and ITA, Mr. Koechlin has pioneered the use of scientific tourism as a vehicle for biodiversity conservation in the Amazon jungle. In fact, E.O. Wilson conducted his seminal work on ants at ITP’s privately managed biological reserve near Puerto Maldonado – identifying the area as having the world record for the number of ant species found in a single location.




14.  Date of Initial Submission of the PDF-A Proposal

February 28, 2001



15. Project Identification Number

506050


16.   Contact Person in the GEF Executing Agency

Mr. Sam Keller, Projects Officer, skeller@ifc.org



17.   Project Linkage to Implementing Agency Programs:

The GEF's existing portfolio in Peru aims largely at strengthening the country's capacity to implement the National System of Protected Natural Areas and developing a participatory approach to protected area management.  There are several full-sized projects and roughly five medium-sized projects (MSP) under implementation by UNDP and the World Bank for this general purpose. The proposed Inka Terra MSP will complement these GEF projects by increasing the involvement of the private sector in protected area management.  It will also complement these projects by demonstrating that some protected areas have the potential to be self-financing through on-site revenue-generation if appropriate market linkages are established.


The proposed Inka Terra MSP also builds upon IFC’s portfolio of biodiversity projects. IFC has provided support to various types of “biodiversity businesses”, which are commercial enterprises that help to conserve biodiversity. Either directly or through intermediaries, IFC has helped to finance organic agriculture companies, ecotourism companies, sustainable cocoa growers, a sustainable hearts-of-palm producer, a sustainable babassu producer, a shade-grown coffee producer, and a poison dart frog export company. IFC has also supported protected area management through innovative approaches in the Philippines (Asia Conservation Company) and Indonesia (Komodo National Park). The Inka Terra MSP builds upon these initiatives by providing a promising new model: An ecotourism company will manage several new attractions in order to increase revenues, which, in turn, will cover the long-term costs of managing a biological reserve and working with local communities.
The Inka Terra proposal does not overlap geographically with any other GEF project in Peru. Cooperation shall take place with an MSP currently under implementation by UNDP called Conservation and Sustainable Use of the Biodiversity of the Amarakaeri Communal Reserve and Indigenous Lands. Located along the south-eastern border of the Manu National Park, this project seeks to enhance biodiversity conservation through participatory preparation and implementation of management plans at several sites. The Inka Terra project will be coordinated with UNDP's activities to ensure maximum benefits from information sharing and lessons learned.


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