Final Report - Asian Development Bank

32 Main Report
96. The final size of the transfer will depend ion the need of each enterprise and the CDA
program. For the CDA program the scale of the final program is determined by the scope of work
planned and this can be adjusted to accommodate the available resourcing. With the asset and
capital structure of QNBG unknown the PPTA has applied a charge against net profit after tax. To
achieve the expected minimum scale of program that currently costs $400,000 per annum a charge at
8% of net profit is necessary (see Table 3).
Table 3: Projected Financial transfers to the Eco-fund based on 8% of Net Cash Flow – CNY
0`000’s
2012 2013 2014 2015 2016 2017 2018 2019 2020
Qinling Botanical garden 148 186 152 195 238 280 323 366 409
SARC 120 120 120 120 120 120 120 120 120
Hotspring 32 32 32 32 32 32 32 32 32
Total CNY (0000) 300 338 304 347 390 432 475 518 561
Total USD (000) 400 451 405 462 519 576 633 690 747
97. The amount generated will increase in time as profits increase through visitation growth and
fee increases. The amount raised even at an acceptable charge of 15% (equivalent to a commercial
return on assets) is significantly higher and represents a very good opportunity for SFD to reinvest
into conservation throughout the wider Qinling Mountains see Figure one. As such the Project could
act as an incubator for future investment and commercial conservation programs.
USD (000)
1400
1200
1000
800
600
400
200
0
Projected Revenue Transfer
2012 2013 2014 2015 2016 2017 2018 2019 2020
5% reallocation 8% reallocation 10% reallocation 15% reallocation
15% reallocation
10% reallocation
8% reallocation
5% reallocation
98. The revenue available for CDA programs could be allocated to the following guidelines (i)
Monitoring 25% ($100,000), (ii) habitat development 40% ($160,000), (iii) implementation of
endangered species management plans 10% ($40,000), (iii) livelihood improvement ($100,000). As
the amounts increase the funds allocated to wider livelihood and conservation programs can also
increase including options such as scholarships for residents of the Qinling Mountains to work in
conservation or livelihoods, livelihood enterprise grants etc.
99. ADB should seek an assurance for loan negotiations that this is supported by the Government
and then require an official agreement with each of the enterprises to this effect before loan
effectiveness.