This report was written in preparation of phase 2 of Ereto. The report notes the important effects of Ereto 1 on poverty reduction amongst the pastoralists of Ngorongoro Conservation Area, especially in terms of restocking and access to both water and livestock health. Positive relationships had been developed, levels of trust raised and competences improved amongst the communities in the area. Communities were better able to lead their own development as a result. Despite initial difficulties, Ereto had managed to find a positive way of working with Ngorongoro Conservation Area Authority (NCAA). However, the project had not managed to institutionalise project activities, and more time would be required to achieve sustainability of project work, both at community and area levels. The report notes that the institutional environment is dominated by the presence of the NCAA and the institutional situation is highly unusual. There are important questions about representation of the people that should be examined by stakeholders in future phases of the project. Also the report notes that the situation of HIV/AIDS is alarming and that phase 2 will be obliged to take a direct role in promoting HIV/AIDS awareness. The report finds that overall the first phase had achieved a great deal, which still needed to be consolidated by continued support and a shift toward a more sustainable empowering approach.