Perú: Reserva Ecológica Inkaterra

Monitoring & Evaluation

The project sponsors and IFC have established a rigorous monitoring and evaluation plan, which will be further refined during the first stage of project implementation. A basic summary is provided below.

Monitoring
A comprehensive set of indicators has been established to measure the project’s effectiveness in implementing each set of activities and achieving each expected outcome. A summary of these indicators can be found in the log frame at the front of this document. ITA will be responsible for monitoring these indicators and reporting progress in their quarterly reports to IFC. Participating community members will also help to monitor certain indicators, such as the occurrence of illegal logging. Both ITA and the participating community members will make sure that rigorous baseline data is obtained at the start of project implementation.
Evaluation
Although monitoring will be done by ITA, formal evaluations will be done by a third party in Peru. The formal evaluations will be done at Year 1, Year 2.5, and Year 4. The evaluation at Year 1 will emphasize process and will be designed to give feedback to the implementation team; it will also be a dry run of the impact evaluation. The evaluation at Year 2.5 will emphasize impacts, and will also draw lessons on the most effective processes. Finally, the evaluation at Year 4 will examine the extent to which the project has achieved its overall goals.
Although the M&E plan has been designed to answer many specific questions about the project, in the broadest sense it will seek to determine: (i) the impact of the project in mitigating threats to the forest; (ii) the ability of the project to generate sustainable long-term finance for conservation and community development; (iii) the ability of the project to establish a replicable model for harnessing private sector resources and know-how to help make protected areas self-financing.
The project has crafted a cost-effective approach for achieving its M&E plan. It will control costs by allowing the implementation team to gather the monitoring data (as opposed to relying on an outside contractor). And it will contract Peruvian consultant(s) to conduct the external evaluations in an affordable manner (in conjunction with full participation from IFC).

Replication

This project contains numerous aspects that have considerable potential to be replicated in Peru and elsewhere:¹⁶

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  First of all, there is considerable potential for other ecotourism organizations to obtain long-term forest concessions in Peru. Inka Terra is a pioneer in this regard and is committed to sharing its experience and expertise with other organizations.
  

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  Second, it is highly innovative for an ecotourism company to establish a parallel NGO. This allows the company to operate successfully as a business, and the NGO to operate effectively as a not-for-profit organization. This approach can help to maximize the benefits for biodiversity conservation. There is significant potential for other ecotourism companies in Peru and elsewhere to establish strategic partnerships with conservation-oriented NGOs (if not form their own parallel not-for-profit organizations). ITP and ITA are committed to documenting and sharing their experience with other companies and NGOs in order to foster similar partnerships.
  

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  Third, there is major potential for environmental NGOs in Peru and elsewhere to develop revenue generating activities so they will be less dependent on grants. ITA arose from the for-profit private sector; as a result, it’s staff has knowledge and appreciation for the need to generate sales revenues from environmentally-friendly economic activities. ITA will therefore assist other NGOs to develop business plans and initiate revenue-generating activities.
  

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  Finally, there is significant potential for entrepreneurs in Peru and elsewhere to initiate businesses based upon the sustainable use of biodiversity. ITP and ITA staff members will give presentations at business schools and other locations in order to encourage people to become interested and active in launching additional “biobusinesses.”
  

ITA Cash Flow Projections

T
he following cash flow projections are based on the “Most Likely Scenario” described on page 18. They are based on conservative assumptions about future occupancy rates and other parameters.¹⁷ It would be possible for the Reserva Amazónica lodge to generate even more funding for ITA. If so, ITA would be able to implement significant ongoing educational campaigns and devote funding towards researching and developing new “bio-businesses” – i.e., additional ways for ITA and local communities to sustainably generate economic benefits from the forest reserve.

Annex 1: ITA’s Organizational Structure

As incorporated under Peruvian law, the formal organizational structure of ITA is as follows:

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  As the highest-level body within ITA’s organizational structure, the General Assembly consists of individuals and organizations who have signed ITA’s Articles of Incorporation. It is responsible for electing ITA’s Board of Directors and determining the broad set of policies that will guide the organization’s programs and activities.
  

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  The Board of Directors is in charge of approving the specific programs and activities to be carried out by ITA. It is made up of ITA’s President (José Koechlin), Vice President (Denise Guislain Mc Kee), Treasurer (Máximo Collao Castro) and General Manager (José Purisaca). It will receive assistance from an Advisory Committee and a Technical Committee.
  

Figure 14: ITA Organizational Chart

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  The Advisory Committee will provide advice to the Board of Directors regarding the formulation of policies, strategies and programs. It will be made up of representatives of donor institutions, local and international conservation NGOs, scientific research institutions, and other organizations with expertise in biodiversity conservation. These organizations may include INRENA, CONAM, ACEER, Moore Foundation, Conservation International, Missouri Botanical Garden, National Geographic Society, UNDP, San Marcos Natural History Museum, and the University of Cusco. GEF is welcome to nominate a representative for the Advisory Committee.
  

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  The Technical Committee will consist of individuals who are specifically knowledgeable about environmental and social issues in the Peruvian Amazon and the various efforts underway to address them. It will help to ensure that ITA’s activities in southeastern Peru are well coordinated with other conservation-related efforts.
  

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  The President (José Koechlin) will liase with the General Assembly and handle other high-level strategic work.
  

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  The General Manager (José Purisaca) will be responsible for the following: (i) implementing the decisions of the Board of Directors and the recommendations of the Advisory ecommendations of the Advisory Council and Technical Committees; (ii) overseeing the technical aspects of the project and supervising the individuals involved in implementing each project component; (iii) elaborating new strategies for supporting local communities; (iv) developing technical proposals for new bio-business opportunities (v) establishing strategic alliances with other organizations; (vi) disseminating information and lessons learned. The General Manager will receive support from an Administrative Assistant and Accounting Assistant.
  

1 The Reserva Amazónica lodge was formerly known as Cusco Amazónico.

2 To date Inka Terra Peru has been authorized to lease the 10,000 hectare reserve because of a Ministerial Decree. However, Peru’s Flora and Fauna Act of 2000 provides a more solid legal basis for managing long-term forest concessions for ecotourism purposes. Since the regulatory framework for this law has recently been completed, the concession is being officially awarded to Inka Terra Association in accordance with this legislation. Henceforth Inka Terra Association will need to demonstrate to INRENA each year that the reserve is being properly managed. The regulatory framework of the Flora and Fauna Act stipulates that concessions may be revoked if the concessionaire does not fulfill its responsibilities.

3 Juan Velasco and Juan Pablo are located adjacent to each other and in some respects are like a single community.

4 The community of Madama consist of 25 families that have moved to the area from Puerto Maldonado over the past decade. These families actually invaded the reserve, establishing Madama within its boundaries. They received legal title – which superseded Inka Terra’s concession – to 30 hectare parcels amounting to 400 hectares in total. However, more recently the Peruvian Government has modified the boundaries of the reserve so that Madama no longer falls within the reserve.

5 As described in the Implementation Plan, this will be subject to a minimum payment (“floor”) of US$132,000 and a maximum payment (“ceiling”) of US$400,000.

6 During the PDF-A process, considerable attention was devoted to ensuring that the planned ecotourism activities will fall within the carrying capacity of the reserve. Indeed, even if there are enough visitors to achieve the Optimistic Scenario (see Sustainability section), this means that an average of less than 70 individuals will visit the new attractions per day. Biologists are highly confident that this will not significantly impact the biodiversity of the reserve as long as ITA puts in place appropriate management systems (which it is committed to doing).

7 This infrastructure will also provide opportunities for scientific research into the aguajal ecosystem.

8 In fact, the Primate Rescure Center will be directly supportive of the Species Conservation Objectives in Appendix II of the Convention in International Trade in Endangered Species (CITES).

9 The basic costs of managing the reserve and working with the local communities is estimated to be $132,000 per year.

10 The ceiling of $400,000 was agreed upon through negotiations between IFC and Inka Terra Peru. It is realistic to expect that this figure may be achieved because it assumes feasible prices (i.e., $183/two night stay) and occupancy rates (i.e., 55%). If ITP revenues reach a level that triggers the capped payment of $400,000, then ITP will have been appropriately compensated for its risk and ITA will have plenty of funds to launch additional conservation-related projects.

11 It would not be possible for GEF to provide these funds as equity because ITA is an NGO, not a for-profit company.

12 ITP will be obligated to contribute additional funds if there are cost overruns.

13 Inka Terra will continue to collaborate with the Ministry of Tourism, Peruvian Association of Adventure Tourism and Ecotourism (APTAE), and the Peruvian Association of Hotels and Restaurants (AHORA) in a joint effort to develop a Peruvian ecotourism certification system. Having formed the National Commission for Tourism Certification, these groups are seeking to implement a certification system referred to as the “Sello Verde Inka” (SVI).

14 In accordance with the Inka Terra business plan, these scenarios assumed that Inka Terra’s accomodation prices – and its operating costs – will increase by 2% each year. This is appropriate given that inflation in Peru was 0.2% in 2002 and is expected to be about 2% in 2003 and 2004.

15 The “Most Likely Scenario” is expected to occur because it is based upon the most realistic assumptions, given all the due diligence and market assessment that has been carried out.

16 This project is also innovative and replicable because it allows the GEF to utilize non-grant financing.

17 An NPV analysis was not conducted because it would require selection of a particular discount rate, which was not appropriate in this case since there is no specific required rate of return. An IRR analysis was conducted instead because it gives a more useful picture of the robustness of the expected cash flows.