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Planting Empowerment (PE)

Planting Empowerment (PE). 4 former Peace Corps Panama Volunteers solving rural poverty and deforestation. Problems. Deforestation Rural Poverty. The Cycle of Deforestation and Rural Poverty:. Rural Poor Farmer: Acquires the land through squatting Logs virgin forest

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Planting Empowerment (PE)

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  1. Planting Empowerment (PE) 4 former Peace Corps Panama Volunteers solving rural poverty and deforestation

  2. Problems • Deforestation • Rural Poverty

  3. The Cycle of Deforestation and Rural Poverty: Rural Poor Farmer: • Acquires the land through squatting • Logs virgin forest • Slashes and burns the land, depleting the soil • Sells to timber plantation company or cattle rancher • Relocates to new block of virgin forest • Starts cycle over again

  4. … but, what alternatives do they have other than the cycle to feed their families?

  5. PE Project Nuevo Paraiso - 2008 100 Hectares(247 acres at 2.47 acres per hectare) Arimae, PanamaLegal Indigenous Reservation (pop. 1000) Nuevo Paraiso, PanamaLatino community (pop. 200)

  6. Current Plantation Model INVESTORS Capital Investment Timber Company • OPERATING COSTS • Materials • Labor • Administration • Rural Landowner • Sells Land • Exits Transaction

  7. PE’s Solution INVESTORS $1.5 million for 100 hectares PLANTING EMPOWERMENT • OPERATING COSTS • Materials • Labor • Administration • Chico • Upfront lease payment • Monthly Lease payment • % of Timber sales

  8. Initial Capital Investment 100 Hectare Timber Plantations • Investor: $1,500,000 (100%) • PE: none • Landowners & Communities: none

  9. Cash Flows to PE Stakeholders • Investor: 80% (IRR of 10.8%) • PE: 13% (PE’s profit) • Communities and Landowners: 7% Assumptions: See Appendix A Year 0 ($1.5 million) Year 8: $793,500 Year 12: $1,244,200 Year 20: $2,158,200 Year 25: $10,310,900 InitialInvestment FinalHarvest Thinnings

  10. Overview: Global Timber Market • Teak prices on the world market rose 3.97% annually from 1997-2005[1] • Mahogany export prices (from Peru) grew 9.7% annually between 1998-2006[2] • Within Panama there is a large market for the 6-8 PE timber species. [1] ITTO Annual Report 2005, Appendix 4, table 4-2. [2] ITTO Market Report, December 1-15th 1998; and ITTO Market Report, Jan. 1-15, 2007.

  11. Competition Matrix

  12. Competition Evaluation

  13. SROIto the participating landowners and the communities ofArimae and Nuevo Pariaso, Panama:

  14. SROI • Quantifiable returns: 100 ha plantation See Assumptions: Appendix B, Table C • Unquantifiable returns: • Political empowerment for Indigenous • Increased biodiversity • Improved reforestation model

  15. Sources of PE’s Capital • Who: • Wealthy Individuals • Conservation Oriented Foundations and Endowments • How: • Lectures and networking with conservation groups • Partnerships with Advantage Tours and Pajaro Jai Foundation • Business plan competitions

  16. Management Team • PE IN-COUNTRY ONSITE MANAGEMENT2 Planting Empowerment Team Members (Meyer and Croston) • PANAMANIAN FORESTER Carlos Espinosa: Panamanian career forester • Advisors • WORLD BANKDr. Gerhard Dieterle, Forester • UN DEVELOPMENT PROGRAMJose Miguel Perez, Global Environment Fund • CONSERVATION INTERNATIONALDr. Richard Rice, Chief Economist • FORMER NY CITY PENSION FUND MANAGER Adam Bluementhal • JOHNS HOPKINS, INTERNATIONAL DEVELOPMENT PROGRAMDr. Francis Fukuyama, Director • MOLINA & MOLINA, ATTORNEYSPanama City

  17. Current Status: a going concern • January 2007: • PE incorporated in Panama • Signed long term leases for 10 hectares from rural farmers • Ordered 12,000 saplings for May delivery • May 2007: Initial Project • Plant 12,000 saplings on the 10 hectares leased to PE

  18. Project Cost Structure • No maintenance costs after year 7 • 5% harvest fee of total sale value pays for marketing and harvesting years 8,12, 20 & 25 • For Assumptions see Appendix B, Table A

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