CLEAN DEVELOPMENT MECHANISM

The project " Forestación y Reforestación, en el Distrito de Pias - La Libertad-Perú"  will be partly financed with the "Certificates of Emission Reduction" CER as established in the Kyoto protocol and in the subsequent Conferences of the Parties (COP).

An abstract of the Project Idea Note (PIN) is presented:

Forestación y Reforestación, en el Distrito de Pias-La Libertad-Perú

 

Descripción general

Project description and proposed activities

 

 

 

 

 

 

The project will reforest 7,319 hectares in the terrains of rural communities located in the districts of Pias and Pataz, La Libertad-Peru region.

The aim of the plantations is to satisfy the demand of wood generated by the local mining companies like Poderosa, Horizonte, Real Aventura, Retamas, among others. The wood is used in the extraction process in relevant quantities and is actually bought form distant areas at higher price due to transport costs.

The project also intend to propitiate the development of the local forestal industry which will transform the wood into local consumption products (furniture, tool handles, etc) for general use of the communities and for the mining companies.

The plantations will be established mostly in abandoned marginal lands, and/or in those terrains that have a high forestry vocation but are actually used in an inadequate way for activities like subsistence agriculture.

These plantations will principally use Eucalyptus globulus (Eucalyptus) and Pinus radiata (Pine); in some areas for land protection purposes some native species will be used, such as Alnus acuminata (Aliso), Polylepis racemosa (Quinual) and Buddleya incana (Quishuar).

The project area contains an extension of 8,311 hectares, of which 7,319 are eligible for forestal plantations, according to the terrain characteristics; 50% of  this area will be cultivated with eucalyptus and the other 50% with pine.

The harvesting age of the Eucalyptus is 13 years while the pine is 20; in consecuence the time limit for the establishment of the whole plantation has been set to 13 years and the design of the forestry activities has been oriented to the reforestation of 7,319 hectares, in a 13-year period, with an pace of 563 hectares per year, thus requiring 750,000 plants per year.

It’s important to point out that Eucalyptus will be harvested on year 15, taking into account that the first two years of activities will be dedicated to land preparation and seedlings production.  At year 15 the project will begin to generate incomes for an amount around US$ 10,926,434,  up to US$ 20,875,770 in year 22, when Pine plantations will be harvested.  At year 20 carbon sequestration associated to the whole project will be in the order of  2,000,000 TCO2eq.

The project’s implementation cost during the first 14 years has been calculated in US$ 3,108,175; on year 15 the harvesting activities will generate enough income to make the plantation sustainable.

Its important to point out that La Poderosa Mining Company has a demand of 4,130 MT of wood per year, existing other three mining companies in the zone.

Tecnology to be employed

 

The technology to be used in the seedlings production phase will be different for Pine and Eucalyptus.  The first one will be produced directly on soil, while Eucalyptus will be produced using polyethylene bags.  The breeding ground and infrastructure will be of temporary type and located in strategically near the plantation zones.

The plantation will be realized using the square system or the real frame system with a density of 1100 plants per hectare in both cases.  Previous to plantation cleaning, pit marking, pitting, and land preparation activities will be done. 

Once the plantation is set up, the project will execute activities like fire breaking corridors maintenance, disease control and monitoring plans, growth monitoring on sample plots to determine the performance of the stands, etc..

For the operation and maintenance of the plantations activities like stem formation, pruning, selection and a proper resprouting management will be realized in the case of Eucalyptus; the same activities will be realized for the Pine with the exception of resprouting.

el manejo de rebrotes.

Project developer

Name INSTITUTO PROMOCIÓN Y DESARROLLO AGARIO-IPDA
Web

www.ipdaong.org

Name Società Generale di Ingegneria S.p.A.
Web

www.sgi-spa.it

Project sponsors

Name Compañía Minera Poderosa S.A.
Web  

Type of the project

Greenhouse gases targeted

 CO2

Type of activities

Carbon Sequestration 

Location of the project

Country 

Perú

City

Trujillo - La Libertad.

Location detail

The project will be developed in the northern Andes of Peru, department of La Libertad province of Pataz, including the district of Pias and part of the district of Pataz.  

Pias is located north of the district of Pataz, 18 M  0219401,  UTM  9129368, with a mean altitude of 2,650 m.a.s.l..

Pataz is located north of the province of the same name, 18 M  0213901,  UTM  913874,  with a mean altitude of 2,660 m.a.s.l.

 

The rural communities involved in the project are Pamparacra and Pias (district of Pias) and Suyubamba (district of Pataz)

 

 

Expected schedule

Estimate of time required before becoming operational after approval of the PIN

Required time for financial commitments:                          6 months

Required time for legal matters:                                       2 months

Required time for negotiations:                                        2 months

Required time for establishing the project:                         8 months

Expected first year of CER delivery

 2010

Project lifetime

The project is sustainable during the years, the first plantation activities will be developed over 13 years. The financial analysis has been done over a 65 years period.

Expected environmental and social benefits

Estimate of Greenhouse Gases abated / CO2 Sequestered (in metric tons of CO2-equivalent)

Millions of metric tons of CO2-equivalent – M ton CO2e:

 

Baseline scenario

The project area is located inside and around the buffer zone of the “Rio Abiseo” National Park.  This territory is suffering a hard pressure over the Park territories and resources, caused mainly by the lack of productive opportunities with economic viability.

The areas included in the project shows high deforestation rates, with severe problems regarding the extinction of valuable native species like the Cercidium precox (Kanaquil) which has a high rubber production capacity.  Native forests are still forming small relicts, mostly in marginal areas with protection functions, sometimes used as fuel sources by the local communities. The deforested and degradated areas are also suffering an accelerated hydraulic erosion process which in some areas reach the level of total soil loss that became useless for traditional productive activities. 

Existent vegetation and present use

 

The forest coverage in the project area is less than 30%. The forest plantations realized by “La Poderosa” Mining Company over 289 hectares only can be considered as a dense forest.

The present land use in the project area shows an inadequate management of the resources. The map of present land use distributes the activities as follows: 

Land use

hectares

Agriculture

1,616

Pastures

4,294

Forest use

33

Dense Forest

289

Semi Dense Forest

1,805

Degraded Lands

294

 

Nevertheless the natural capacity of the area is predominantly suitable for forestry activities. From the 8,133 hectares of the study 7,319 hectares have forestry aptitude, and the 814 remaining hectares are areas of agricultural vocation and pastures where activities of productivity improvement will be developed to secure livelihood sustainability.

Specific Environmental Benefits

The sustainable land use, based on its natural capacity, will enhance the quantity and quality of the environmental services related to the existence of forest ecosystems (fertile grounds, clean water, mitigation of climate change, etc.), taking in count that these services are essential for the survival and welfare of the community and the mankind.

Some of the environmental services that the project aims to generate by managing new forest areas are:

Flooding, landslides and sedimentation risks reduction.

Pressure reduction over the native forests, increasing the possibilities to use the native forest for pharmaceutical or tourism purposes in a sustainable way.

Erosion control and slope protection, favoring the production of better quality and more quantity water, as well as developing better conditions for electricity generation.

Mitigation of climate change effects through the sequestration of carbon.

Response to negative impacts of climate change through agricultural and forestal product diversification and generation of new incomes less propense to losses by extreme weather conditions.

Landscape improvement and forested areas functioning as refuges for native fauna, with possibilities for reintroducing species already disappeared in the area.

Local benefits

 

Job generation linked to the forestry activities with an intensive use of  non-qualified or medium-qualified workers.

Soil protection, taking in count that forest restoration implies the management of soil resources. Its known that forest contributes to improve soil quality.

Conservation of water sources for human consumption. Forest plantations can be a good practice to assure the recharge of underground water, contributing also to prevent landslides and floods.

Shelters for fauna protection and improved habitats for native wild fauna.

Landscape improvement with a positive visual impact, opening possibilities for tourism activities associated to the “Rio Abiseo” National Park.

Global Benefits

 

Mitigation of the effect of Climate Change through carbon sequestration, with a total amount of abduction and storing of carbon, capturing approx. 2,026,595 tons of CO2e

Protection of the areas surrounding the “Rio Abiseo” National Park, reducing the risk of destruction of an important biodiversity spot, allowing the conservation and improvement of genetic material.

Socio-economic aspects

The forestal activity is labour intensive and occupies mainly non-qualified or medium-qualified workskill. The type of activities to realize will improve gender equity in the employment.

A very important impact will be the increment in the family and individual incomes, with greater welfare and improvement in the acquisitive power of the population, thus reducing the migration indexes.

The project will also diversify the job opportunities generating parallel activities.

Without the project, the population will continue being sunk in poverty. The few economic opportunities that exist in the zone are represented by the mining activity in which the population is employed in a temporary and limited way.

Direct effects

Generation of local employment.

Increment in the family income

Cost reduction of forestal products for the mining activity in the zone.

Generation of new investment opportunities related to wood transformation.

Reduction in the import of wooden products.

Other effects

 

A project component will be directed to execute important training programs in agriculture and forestry activities.

The project will implement of modern productive technologies in which the tree is integrated to the traditional productive systems.

New opportunities will be created in the forestry industry and in other economical activities such as pharmacy, tourism and agriculture.

Finance

Total project cost estimate

USD 3.45 millones

Referencial price of CER

3 USD

Emission reduction value

USD  13,323,785

Until 2012

USD      452,995

A period of 10 years

USD   1'576,714

A period of 7 years

USD      675,380

A period of 14 years

USD   4'821,233

A period of 20 years

USD   6'079,785

A period of 30 years

USD   4'855,842

A period of 40 years

USD   6'079,785

A period of 60 years

USD   6'079,785

Finacial analysis

 

 

INDICATOR

UNIT

VALUE

NPV without CER’s

US$

10,298,911.04

IRR without CER’s

%

34.57%

NPV with CER’s

US$

11,371,740.00

IRR with CER’s

%

35.08%