Academic literature on the topic 'Financial investment project'

The paper determines the relevance and purpose of the study. The characteristic and functions of a special purpose vehicle of project financing are presented. The conditions of project lending are described. The ways of ensuring financial stability of the investment and construction project at various stages of its life cycle are considered. At the preinvestment stage, the financial model and budget of the project are considered as a mechanism for ensuring the sustainability of the project. The directions of normative and methodological support for effective financial modeling and project budgeting in the context of project financing are identified. At the implementation stage, a cost control system for the investment and construction project was developed. A formal decomposition of the control system under study is proposed, and a functional description of the subjects of control is presented. The conditions of preserving the project within the budget and adaptive management of investment and construction projects are considered.

The article explores the main directions for improving the management of the investment process on the basis of the development and use of the financial model of the investment project, which is proposed to be considered as a decision making tool at all stages of financing. From a practical point of view, such a model is a digital form of presenting the results of the calculation and analysis of the main parameters of the investment project in order to assess the feasibility and effectiveness of its implementation. The purpose and main tasks of the development and use of the financial model of the investment project, which consists in ensuring its functionality, accuracy and reliability of the calculations, coverage of all stages of implementation and the main indicators of the project, informativeness, as well as ease of use for the purpose of effective project management, are determined. The basic principles of model formation, which include integrity, systemicity, uniformity, transparency and consistency, are distinguished. The methodology and sources for forming the Book of assumptions and input data collection for building a financial model are described. Its structure and conditions, which form the level of validity and reliability of the results of calculations, are determined. The sequence of actions of project managers regarding the development, verification and use of the financial model in project financing is characterized. The system of indicators, which, in a generalized way, characterize the main results of the project implementation, its investment attractiveness, sustainability and economic efficiency, is defined. The factors of sensitivity of the investment project to the influence of external and internal shocks are described. The necessity of using a single methodology and unification of the financial indicators and calculation processes used in the construction of the financial model to optimize financial flows and improve project risk management is proved

Purpose The purpose of this paper is to identify, measure and optimise financial risk and its effect on returns from innovation projects on an accrual basis and on a cash basis in a commodity industry. Design/methodology/approach A hypothetical case study, based on a real case, of a petrochemical commodity industry in Brazil was analysed with commodities pricing rules based on actual contracts. Earnings at risk (EaR) and cash flow at risk (CFaR) measures were applied, as well as a metric proposed in this paper called cash balance at risk (CBaR). Findings The paper demonstrates that financial risk measurement and optimisation are important issues in the decision-making process in the petrochemical industry. EaR, CFaR and CBaR measures are helpful when used alongside standard procedures of project evaluation. The findings also show that innovative technologies, in certain conditions, may act as “natural hedging”. It was found that the time delay between revenues and expenses leads to financial risk exposure to changes in prices and foreign exchange rates. Projects can use financing and hedging to boost their results. Originality/value An innovative project was compared with an expansion project in a petrochemical industry. A model for petrochemical commodities contract pricing was added in an analysis that included financing and hedging. The findings in this paper suggest that it is important to consider financial risk measures in project evaluation.

The world practice of projects financing is growing rapidly, this is due to the fact that investments in the state budget or investor's own funds become insufficient for the implementation of infrastructure projects. The article is devoted to the study of such a form of investment organization as project financing. The approaches to the definition of the term «project financing» are considered and the principles characterizing this form of financial structuring of projects are determined. A comparative analysis of project financing with other forms of financing investment projects is carried out. The advantages and disadvantages of project financing in terms of state (budget) financing and corporate financing are revealed. Differences between project financing and venture financing are highlighted. The main factors contributing to the choice of project financing as a form of organizing investments in large capital-intensive projects, as well as factors hindering the widespread use of project financing in the economy of the Russian Federation, are substantiated.

In today’s rapidly changing world, the application of the achievements of scientific and technological progress, the development and implementation of investment projects become a competitive advantage and the key to the successful development of regions, clusters, corporations. In some of the most dynamic industries, investing becomes a matter of not just efficient operation, but also determines the presence of companies in the market. Applied research, and even more so fundamental, requires significant investments, the return on which at the first stages of the development and implementation of investment projects is difficult to predict. The end result is also obviously not predictable, which makes investing one of the most risky areas of activity of modern companies. Therefore, today the development and improvement of investment efficiency are the most important tasks. The institutional and economic environment of developing countries may not be the positive effect expected from attracting enterprise investment. These ambiguous results regarding the impact of investment form the motivation and problem of dissertation research. Identifying and improving methodological and economic parameters for increasing investment efficiency in the electricity industry will always be one of the main tasks for owners of enterprises and managers, which determines the relevance of the study. The article developed a methodological approach to assessing the efficiency of investment projects in the electric power industry taking into account the risks taken into account in calculating the discount rate for each phase of the life cycle of the project, which allows you to more accurately calculate the main indicators of the efficiency of the investment project.

PURPOSE The Article aims to present the potential and capabilities of the application of equity crowdfunding as an option to invest and to form investment portfolios for the individual investors. The emphasis is shifted from the widespread use of the concept of crowdfunding, as a cutting-edge source for providing capital for investment projects of innovative companies (especially suitable source for the so called Startup companies), to its use as a tool for establishing an investment portfolio based on appropriate balance between the rates of return and risk. METHODS Various authors' views on key concepts such as investments, projects, investment projects, equity collective investment, investment portfolios, etc. have been clarified and summarized. The investment process is explained in the context of creating a portfolio of investments using equity crowdfunding platforms. Conceptually, the essential characteristic of the project theory, the theory of collective investment, with its methodological and mathematical tools, are revealed. RESULTS On this theoretical basis and adaptation, a conceptual methodological model has been developed, to be used for selection of portfolio of investment projects for equity collective investment. The model focuses on the optimization of rate of return, given the risk nature of the financial investment instrument used in collective investment. CONCLUSIONS Conclusions are presented about the main advantages and the respective limitations of the type of investments, subject of the paper.

The purpose of the research is to examine the importance of financial rewards and managers’ motivations, including sustainable investment projects. For that, the role of financial motivation for managers is analysed to understand strategic priorities for sustainable investment policies. Panel data for non-financial listed companies in China are used to determine the best-fit values of the proposed model, and the results of the Lagrange multiplier (LM) and Hausman tests are discussed for sustainable investment strategies. The results demonstrate that both low-paid and highly-paid managers in valuable project firms tend to be conservative and that managers consolidate their positions through underinvestment. This finding is clear evidence that managers are reluctant to take a risk on sustainable investment strategies. However, highly-paid managers of non-valuable project firms are generally willing to obtain high productivity through advanced technologies. The results are also generalized for strategies that are related to project managers’ financial motivation to increase the efficiency of sustainable investment decisions.

The option pricing theory has wide applicability in corporate finance, but it is also increasingly used to analyze the effectiveness of non-financial (material) investments. In traditional investment analysis, a project or a new investment should be accepted only if the returns on the project exceed the hurdle rate; in the context of cash flows and discount rates, this translates into projects with positive net present values (NPV). There is no doubt that it does not take full account of the numerous options that usually relate to developer investment. However, in many cases, the valuation of real options is more difficult than the valuation of options for financial assets. In this paper, we will analyze one of the options, which isembedded in capital budgeting projects - the option to delay a project, especially when a the company has exclusive rights to the project. The value of the option is largely derived from the variance in cash flows – the higher the variance, the higher the value of the project delay option. The variance in the present value of cash flows from the project can be estimated in different ways, however, in the case of non-financial investment projects, these methods are very limited. We are analyzing the possibility of estimating this volatility, taking into account the fact that the forecasted cash flows may show varying volatility in individual years. The paper shows, that by using a probability-based valuation model (using the Crystal Ball techniques) it is possible to incorporate uncertainty into the analysis. The method of presented volatility estimation can be applied by taking into account the randomness of many input data to the project.

Purpose – The purpose of this paper is to propose a risk-based framework to estimate the option value of infrastructure investment, accounting for the stochastic behavior of both financial and physical (engineering) variables. Design/methodology/approach – This study uses a real-options approach and computes the optimal investment dates and option values using Least Squares Monte Carlo, both the original Longstaff – Schwartz algorithm and the constrained Least Squares approach of Le tourneau – Stentoft. Findings – Real-option value for infrastructure investment is substantial. It is beneficial to model jointly financial and engineering risks to better understand the timing and real-option value of infrastructure investment. The analysis further shows which variables are option value drivers. Research limitations/implications – Future work could integrate financing constraints into the model, consider path dependency in the physical state variables or integrate sovereign risk, expropriation risk, operational risk or other project risks. Practical implications – Financial practitioners and investment managers interested in infrastructure risk finance or project finance will benefit from a novel framework to analyze infrastructure investments in which engineering and financial risks interact in a tractable way. Social implications – Public decision-makers will benefit from a better understanding of what determines the value of infrastructure investments, how real-option value affects optimal investment timing and how both are determined by financial and engineering risks. Originality/value – The analysis considers financial and engineering risks in a single framework to better understand option value in infrastructure investment. The framework and findings are useful both to risk finance and project finance practitioners and investors as well as engineers and public sector decision-makers.

The implementation of major investment projects in the gas sector is associated with different risks. To assess the impact of parameter changes on the financial result of the project is proposed to use the schedule "Spider", which allows you to clearly define how the results of the project NPV, depending on changes in values of the main input parameters of the project: selling price, capital expenditures, operating costs, production level. It determines the optimal structure of investment capital Monte Carlo.

Magistro baigiamajame darbe išanalizuota ir pateikta finansinių investicinių projektų vertinimo metodika, ši metodika pateikiama praktiškai, pritaikant ją vertinant konkretų finansinį investicinį projektą – mažųjų ir pramoginių laivų prieplaukos statybą Klaipėdos valstybiniame jūrų uoste. Pirmoje darbo dalyje teoriniu aspektu tiriamas ir apibendrinimas finansinių investicinių projektų finansinio, ekonominio ir socialinio vertinimo mokslininkų išvadų turinys, taip pat pateikiamos investavimo ir vertinimo sąvokų apibrėžtys. Antroje darbo dalyje identifikuojamas nagrinėjamo projekto aktualumas, pasirinkimas, aptariamas ir numatomas šio projekto preliminarus ekonominio – socialinio kontekstas, pateikiamas konkretaus minimo projekto finansinio, ekonominio – socialinio vertinimo metodas, aptariamos galimos alternatyvos. Trečioje darbo dalyje apskaičiuojamas ir įvertinamas naujos mažųjų ir pramoginių laivų prieplaukos Lietuvoje poreikis, pateikiami ir apskaičiuojami finansiniai projekto rodikliai, kuriais remiantis apskaičiuojami ir ekonominiai bei socialiniai nagrinėjamo projekto rodikliai. Pagrindžiami finansinio investicinio projekto ekonominis – socialinis teigiami vidaus ir išorės efektai, įrodomas projekto naudingumas investuotojui ir visuomenei.
In this Master's Work there are analyzes and presented the method of the financial investment projects economical – social assessment. This method is taken into practice by assessing the special financial project of water transport sector, which is – „Small and pleasure boat marina construction in port of Klaipeda“. In first part of the work it can be found a summary of scientific papers and research findings, definitions of related concepts. In second part, there are identified problems of the economical – social field discussed in the context of water transport in Lithuania. Also there it is shown the specific method of the financial project assessment. And finally, in the last part of the Master's Work it is shown what financial, economic, social indicators of the financial project were found by adopting the method. According to these indicators it is presented what advantage affect can be reached by approving this specific financial project.

The project examines the relationship between trade interdependency and correlation of market returns between the United States and the four emerging economies of Singapore, Malaysia, Thailand and the Philippines. The author analyzed statistical data for trade interdependency and market return to determine if there is a pattern that would provide the basis for increasing the return of a security portfolio without increasing the risk to the investor. The project analysis relied on mathematical formulas to measure the trade relationships between the selected countries and to calculate the measure of return and measure of risk of investing in each emergent market.

Master´s thesis deals with project that invests into construction of retail store and tasting cellar of company Vinné sklepy Valtice, a. s. Thesis contains the assessment of company’s financial position, evaluation of investment effectiveness and the comparison of individual offers from bank institutions. The main part of thesis contains analysis of consolidated data. Based on this information has been decided whether to proceed with investment or not and then proposed an appropriate plan for financing of this project.

Proposed thesis deals with a new investment project of business company and by new concept of funding. Thesis is based on theoretical findings and detailed analysis. Performed analysis illustrates present situation and compares it to the competition and proposes other analysis connected with the project. On the basis of these outputs, the thesis concludes proper methods of funding with respect to the offer of market and particular capabilities of the company.

The Master thesis contents a propsal and evaluation of an investment project. The master thesis is divided into a theoretical and a practical part. The theoretical part describes the investment project together with an investment plan. The investment plan is further developed in more details and deals with a market analysis, a marketing plan, a size and a location of a company, its human resources, an operating plan, a financial plan, a financial analysis and above all with methods of assessment of investment projects. The practical part focues on a specific investment project proposal and its subsequent evaluation. The proposal offers a marketing research with a financial plan and financial analysis. The assessment of the project is carried out by using different methods of assessment of investment projects.

The goal of this diploma thesis is to evaluate the investment project of the specific company and to make a recommendation for or against its realization. The first part consists of the theoretical fundamentals of the financial analysis, evaluation of the investment projects and the introduction of the company. These fundamentals are used in the second part to assess the financial situation of the company and to evaluate the investment project. The final evaluation of the whole investment project will be presented in the final part of this diploma thesis.

The thesis analyzed the performance of 5,987 mutual funds using a database called Steele Mutual Fund Experts and compared the predicting ability of various measures of performance. The measures discussed in the thesis are Treynor Ratio, Sharpe Ratio, Jensen's Alpha, Graham-Harvey-1 (GH-1), and Graham-Harvey-2 (GH-2). The performance measures are mostly used by professional money managers and scholars for literary purposes.

My thesis is focused on Project Financing of Investment Projects in the field of Renewable Energy Resources. The theoretical section, see Chapter Two, characterises the nature of project financing, parties, principles for successful project financing, types of capital invested in projects and their resources, risks, guarantees and securities. The practical (third) part of the thesis is oriented to specifics of project financing of Renewable Energy Resources. First of all principles for the assessment both of project bearers and projects in terms of quality are specified. Furthermore, principals for the assessment of financial terms of projects are given. The fourth and concurrently the final Chapter analyses a particular project in the field of renewable energy resources mostly from the financial point of view.

The diploma paper deals with an investment in the purchase of a new horizontal boring and milling machine at a plant being engaged in heavy industry. The paper contains the assessment of company’s financial position, the evaluation of investment project effectiveness and the comparison of concrete offers submitted by leasing companies and bank institutions. The subject matter of the paper is to find out – on the basis of the information obtained – whether to implement the investment project and then to propose an appropriate manner of financing.

The purpose of the present research paper was three fold. First, determine if there is a trade interdependence between the United States and Nordic countries (Denmark, Finland, Sweden, and Baltic States). Second, determine if there is correlation between the respective equity markets. Third, determine if the changes in the trade relations lead to the changes in stock market correlations. The hypothesis of the project was that weaker trade relations between two countries would lead to lower correlation between their stock markets, providing beneficial opportunities for portfolio diversification. The overall objective is to ascertain if Nordic markets are good targets to hedge portfolio risk for U.S. investors, and if the risks of investing in these markets would be rewarded by the higher returns.

The tutorial focuses on challenges of economic evaluation of investment projects. It provides both theoretical and methodological foundations of economic evaluation of investment projects and required a substantial mathematical reasoning. Lighted the economic substance of the investment structure of the investment project, commercial efficiency and financial marketability, and methods of evaluation of investment project risks. The material is presented using the normative legal documents, in particular the Tax code of the Russian Federation, Federal laws, accounting regulations and other sources and meets the requirements of Federal state educational standards of higher education of the last generation. For students, postgraduates and teachers of economic universities (departments), researchers and practitioners, experts in the field of investment activities of organizations.

AbstractThis chapter focuses on financial investments, coming either from public or private asset managers and institutions. It has two main targeted readers (without any exclusion): (i) public and private capital providers, with the objective of presenting traditional and alternative financial instruments and schemes capable to align risk-return profiles of several investment opportunities in the clean energy sector, (ii) project developers, in order to increase awareness of the financial mechanisms available in the market.

AbstractSocial organizations play a very important role in ensuring social cohesion and well-being, but constraints on public expenditure mean fiercer competition for financial resources and greater difficulties in accessing these resources.This case study is focused on CAJIL, a nonprofit social organization that, in this demanding context, is implementing a large-scale investment project. For this reason, CAJIL needs to reinforce the governance structure to assure investors and the implicated public institutions that CAJIL is capable of completing the project and responding to the management challenges associated with the increase in activity and complexity linked to this investment.

Abstract Today, a large number of public research institutes have been set up in many different fields to carry out scientific research. The initial financial investment needed was generally justified by the pure scientific interest. As the number and size of these research institutes has grown over time, the associated investments have become quite substantial. The will to push the frontier of knowledge implies developing and upgrading high-tech instruments, working with cutting-edge technologies, and high maintenance costs, which requires additional public spending. As the available public resources have not evolved at the same rate as scientific ambitions, competition between scientific fields and projects has become fiercer as well as the need for additional arguments to justify these investments.

AbstractNature-based solutions (NBS) implementation in urban contexts has proven outcoming multiple benefits to reverse the current trend of natural resources’ degradation adversely affecting biodiversity, human health, and wellbeing. Yet, the current urban-planning policy frameworks present a rigid structure to integrate NBS definitions, and their co-benefits to get mainstreamed and up scaled on a wider urban spatial dimension. In this research, we test a complete co-creation pathway that encourages decision-makers to embed citizen engagement methodologies as an approach to co-design and co-implement NBS in shared-governance processes aiming to increment the greening of urban spaces, towards more inclusive and climate resilient cities. On one hand, we assess a tendency to involve a multiplicity of stakeholders that collaborate to the establishment of an Urban Innovation Partnership (UIP) aiming at increasing the social awareness around NBS themes, and at the same time tackling both financial and governance aspects. On the other hand, the innovation embedded in NBS paves the way to combine a multi-scalar flexibility in implementation tools and place-based urban actions, hence resulting in widespread economic, environmental, and social impacts in place. The novelty in embedding the co-creation process in urban-planning practice lies in catalyzing resources towards the transposition of research into practice through policy and planning tools for local authorities and decision-makers. Three front-runner cities (Hamburg, London, and Milan) are under investigation as part of Clever Cities—a Horizon 2020 project—aiming at implementing NBS in diverse urban-regeneration processes, through nine up-running Urban Living Labs (ULLs). Grounded on a comparative analysis of these three cities, key characterization for NBS implementation framework could be categorized into: (1) current urban-planning greening strategies in each context, (2) specific environmental and societal challenges addressed, (3) different typologies and scales of NBS integration within urban morphologies, (4) specific governance process as response to co-design and co-implementation processes, and (5) availability of financial investment and main stakeholders. As research results, we emphasize using co-creation approach in urban planning to embed and upscale NBS in an inclusive shared-governance process, hence contributing to social awareness and acceptance. Meanwhile, spatial, and financial challenges could be majorly resolved using a multi-scalar approach to manage newly embedded urban-greening policies at the urban level. Lastly, the implementation scale of NBS with local communities requires a radical paradigmatic shift in societal, individual and administrative urban-planning practices.

Our starting point is the definition and classification of investments, both financial and accounting. Thus, in a financial sense, an investment represents the change of an existing and available amount of money, with the hope of obtaining a higher but probable income in the future. In the accounting sense, an investment is the allocation of an amount available for the purchase of an asset, which will determine the future financial flows of income and expenses. Investments can be classified into two categories: domestic investments - consist of the allocation of capital for the purchase of machines, equipment, constructions, licenses, patents, etc. Their purpose can be to reduce costs, increase production, improve quality, increase market share, etc.; foreign investments - consist of capital investments in shares in other companies. They are also called financial investments and aim to increase the value of the company and diversify sources of income. We also analyze in this article the investment decision. The investment decision is the most important financial decision which a manager has to make. An investment usually involves allocating large sums of money in the long run, with a relatively high degree of risk. We also present and analyze both the stages of establishing an investment decision and the methods of evaluating an investment project. The article also presents management elements regarding the investment recovery term; discounted net value method, investment risk assessment.

The Asian Infrastructure Investment Bank (AIIB), a new multilateral development bank, is an emerging force to solve the problem of infrastructure imbalance in developing countries in Asia. Only a few existing researches focuses on infrastructure investment and spatial governance. Based on the economic geographical framework of density, distance and division, this paper attempts to analyze three traditional governance modes in the context of infrastructure imbalance in developing countries in Asia: low-density sprawl, long distance and limited accessibility to central markets, and spatial division. Infrastructure has obvious positive externalities and will widen the differential rent gaps through land value increment, which will bring higher economic density and agglomeration economies. After analyzing the AIIB’s 38 approved investment projects, this paper takes Colombo urban regeneration project in Sri Lanka, Gujarat rural roads project in India and Mandalika tourism infrastructure project in Indonesia as examples, to explore the AIIB’s non-state role in spatial governance.

The financial performance of a marine energy project is based on assumptions with significant uncertainty. To fully appraise the risk, potential investors require an understanding of the likelihood of deviations from the assumed most likely case for a project’s financial performance. A Monte Carlo Analysis (MCA) model with flexible user defined uncertainty definitions for all inputs is developed for this study. A realistic tidal energy project is used as a case study to compare the central, optimistic and pessimistic Levelised Cost of Energy (LCOE) and Internal Rate of Return (IRR) values derived using commonly used deterministic methods and the probabilistic MCA model. The improvement in decision support due to the probabilistic analysis is shown and the possibility for misinterpreting the deterministic results in highlighted. Two sensitivity analysis methods are employed to identify key risks and emphasise the need to use the most appropriate method for the type of analysis being conducted. Finally, the significance of some commonly ignored parameters is tested and shown to be important for accurately appraising the investment risk in a real project. Thus this paper provides guidance and tools to help investors make informed decisions with confidence.

The loss of economies of scale affects Small and Medium sized Reactors’ (SMRs) overnight construction costs, as compared to Large Reactors (LRs) and is particularly burdensome to the financial performance of a capital intensive project as a Nuclear Power Plant (NPP). Nevertheless, multiple SMRs projects have factors that mitigate the loss of economies of scale. Furthermore, by exploiting investment scalability, SMRs are able to limit the capital investment and to self-finance the construction of later units with operating cash flow from early deployed units. In our forecasted scenarios, SMRs lower profitability for the shareholders may be counterbalanced by savings in Equity capital investment, as compared to LR. This reduces sunk costs and investment risk of SMRs project under uncertain market conditions, in a “merchant plant” scenario where business profitability is as valuable as business risk.

Real options models are currently available as one of the best tools for the assessment of investment projects. This is so mainly due to the capability of the real options models to: (1) account for uncertainties in financial variables that are crucial to the investment project; and (2) quantify the value of the possibility to make a decision on whether to defer, abandon, expand or reduce the project at one or several points along time. Recently, some researchers have proposed the use of real options models for the assessment of infrastructure projects for hydrocarbon exploitation from an economics point of view. The objective of this work is to develop real options models for decision making regarding inspection, maintenance and decommissioning of offshore facilities taking into account the financial and technical aspects of the project. In all cases it is considered that at some point in the future, within the service lifetime of the structure, the decision maker will have an option to carry or not an inspection, and take or not a maintenance or decommissioning action, which will determine the structural and financial performance of the project for its remaining lifetime. The in-service times with no structural failure and the rehabilitation times are modeled as random variables. The cash flows are modeled as stochastic processes considering interruption of operation due to repairs after failure. Analytical expressions are derived for the computation of structural reliability and availability depending upon maintenance actions. An example is given for a jacket platform subjected to fatigue deterioration and damage. Simple and compound options of maintenance and decommissioning options are analyzed. The value of the project is computed by means of an approach similar to that of Black and Scholes for financial options [2]. The results are compared to those obtained under the traditional Net Present Value approach.

Abstract As the most potential Carbon Capture, Utilization, and Storage (CCUS) technology, CO2-enhanced oil recovery (CO2-EOR) can both improve oil recovery and relieve the pressure of reducing CO2 emission. However, CO2-EOR projects have not been substantially deployed in China due to the significant investment and high uncertainties of technology, market, and policy. Therefore, identifying potential bottlenecks, and developing effective investment strategies are of great necessity at present. In this work, a real option approach combined with reservoir simulation technologies is proposed, which can investigate the optimal deployment timing and the investment value of the CO2-EOR projects. Meanwhile, a sensitivity analysis is conducted to examine the effects of different uncertainties. The results show that real option approach is suitable for the evaluation of CO2-EOR projects because it can fully take the flexibility of investment time into account. And it is found that under the current investment environment, it is difficult for China to deploy CO2-EOR projects on a large scale before 2030. High oil prices, low CO2 purchase prices, and transportation of CO2 by pipeline can bring forward the investment time and increase the investment value. Besides, government subsidies and technological progress are also favorable for the deployment of the project. Compared with technological progress, the effect of subsidies is more obvious, while it should be noted that huge subsidies will bring a financial burden to the government. In a word to launch CO2-EOR projects earlier and make it play a more important role in China's carbon emission reduction, a compound strategy should be made based on consideration of all these influencing factors.

To demonstrate the value of research and its implementation, the Governor’s Office requested an annual financial analysis of the INDOT Research Program to determine the return on the research investment (ROI). This report is for the 35 research projects that completed in FY 2019. The ROI analysis will supplement the annual IMPACT report by adding a more rigorous quantitative benefit cost analysis (BCA) to the Research Program. Previous financial analyses used the approach of calculating net present values of cash flows to determine a benefit cost ratio and this report uses the same approach. Additionally, an overall program rate of return (ROI) is reported and will be accumulated over time into a rolling 5-year average. The ROI is expressed as a BCA ratio, which is commonly used by State DOTs and national transportation research agencies when expressing the return on the research investment. By using total program costs in the analysis, rather than just the individual project cost, a very conservative BCA ratio is obtained. Interestingly, the quantified cost savings from a single project frequently underwrites the cost of the entire research program in a fiscal year.

This briefing proposes innovative Pooled Finance Mechanisms to improve the capacity of Brazilian subnational consortiums to implement sustainable infrastructure projects. It provides a legal and financial overview on local subnational consortiums experiences and frameworks. It also analyses international Pooled Finance experiences and provides alternatives for the implementation of innovative financial structures that could leverage the countrys investment capacity in local sustainable infrastructure.

In response to the Paris Agreement and the Sustainable Development Goals (SDGs), the IDB Group Board of Governors endorsed the target of increasing climate-related financing in Latin America and the Caribbean (LAC) from 15% in 2015 to 30% of the IDB Groups combined total approvals by 2020. Currently, the IDB Group is on track to meet this commitment, as in 2018, it financed nearly US$5 billion in climate-change-related activities benefiting LAC, which accounted for 27% of total IDB Groups annual approvals. In 2019, the overall volume and proportion of climate finance in new IDBG approvals have increased to 29%. As the IDB continues to strive towards this goal by using its funds to ramp-up climate action, it also acknowledges that tackling climate change is an objective shared with the rest of the international community. For the past ten years, strategic partnerships have been forged with external sources of finance that are also looking to invest in low-carbon and climate-resilient development. Doing this has contributed to the Banks objective of mobilizing additional resources for climate action while also strengthening its position as a leading partner to accelerate climate innovation in many fields. From climate-smart technologies and resilient infrastructure to institutional reform and financial mechanisms, IDB's use of external sources of finance is helping countries in LAC advance toward meeting their international climate change commitments. This report collects a series of insights and lessons learned by the IDB in the preparation and implementation of projects with climate finance from four external sources: the Climate Investment Funds (CIF), the Forest Carbon Partnership Facility (FCPF), the Green Climate Fund (GCF) and the Global Environment Facility (GEF). It includes a systematic revision of their design and their progress on delivery, an assessment of broader impacts (scale-up, replication, and contributions to transformational change/paradigm shift), and a set of recommendations to optimize the access and use of these funds in future rounds of climate investment. The insights and lessons learned collected in this publication can inform the design of short and medium-term actions that support “green recovery” through the mobilization of investments that promote decarbonization.

The Energy Savings Insurance Program seeks to promote investment in energy efficiency and distributed generation in Latin America, primarily through small- and medium-sized enterprises (SMEs). It focuses on developing an innovative scheme of guaranteed energy performance that mitigates project risk and generates investor confidence (ESI Model). The Inter-American Development Bank (IDB) facilitates the development of the ESI Program in alliance with the National Development Banks (NDBs). The ESI Model includes a contract for the supply, installation, and maintenance of equipment for generating a stipulated amount of energy or energy savings over a specific time period; validation by an independent body; insurance coverage that backs the savings or the guaranteed energy generation; and project financing. This paper describes the main attributes of the ESI Model (the contract, the insurance, validation and financing), evaluates market potential and the most attractive technologies, and identifies the priority sectors for implementing projects in Chile. The most promising economic sectors were found to be the hospitality industry, food processing industry, grape growing/wine production, and the fishing industry, and the technologies of electric motors, boilers, air conditioning systems and photovoltaic solar generation. In each of these sectors, estimates were made of financing requirements as well as CO2 emission reductions that could be achieved.

Investment in transportation infrastructure projects generates benefits, both direct and indirect. While emissions reductions, crash reductions, and travel time savings are prominent direct benefits, there are indirect benefits in the form of real estate enhancements that could pay off debt or loan incurred in the improvement of the infrastructure itself. Studies have shown that improvements associated with rail transportation (such as station upgrades) trigger an increase in the surrounding real estate values, increasing both the opportunity for monetary gains and, ultimately, property tax collections. There is plenty of available guidance that provides blueprints for benefits calculations for operational improvements in rail transportation. However, resources are quite limited in the analysis of benefits that accrue from the separation of railroad at-grade crossings. Understanding the impact of separation in a neighborhood with high employment or population could generate revenues through increased tax collections. In California, the research need is further amplified by a lack of guidance from the California Public Utilities Commission (CPUC) on at-grade crossing for separation based on revenue generated. There is a critical need to understand whether grade separation projects could impact neighboring real estate values that could potentially be used to fund such separations. With COVID-19, as current infrastructure spending in California is experiencing a reboot, an approach more oriented to benefits and costs for railroad at-grade separation should be explored. Thus, this research uses a robust benefits-to-cost analysis (BCA) to probe the economic impacts of railroad at-grade separation projects. The investigation is carried out across twelve railroad-highway at-grade crossings in California. These crossings are located at Francisquito Ave., Willowbrook/Rosa Parks Station, Sassafras St., Palm St., Civic Center Dr., L St., Spring St. (North), J St., E St., H St., Parkmoor West, and Nursery Ave. The authors found that a majority of the selected at-grade crossings analyzed accrue high benefits-to-cost (BC) ratios from travel time savings, safety improvements, emissions reductions, and potential revenue generated if property taxes are collected and used to fund such separation projects. The analysis shows that with the estimated BC ratios, the railroad crossing at Nursery Ave. in Fremont, Palm St. in San Diego, and H St. in Chula Vista could be ideal candidates for separation. The methodology presented in this research could serve as a handy reference for decision-makers selecting one or more at-grade crossings for the separation considering economic outputs and costs.

NDC INVEST is an IDB Group platform offering financial solutions and technical support to help build national goals and transform them into attainable plans that generate prosperous, resilient, and carbon neutral economies. Throughout the years closely supporting LAC countries, NDC INVEST has gained valuable experience and knowledge in designing and implementing concrete actions that lead to long-term climate resilience and net-zero emissions by 2050. In 2020, NDC INVEST confirmed its key role in successfully translating national climate commitments into physical and beneficial economic plans and transformational development projects. 331 initiatives have been supported in IDB Group regional member states through the IDB sovereign window, IDB Invest and IDB Lab. This publication highlights the successful work of NDC Invest in i.) developing relevant knowledge and building national capacities for long-term strategies (LTS), ii.) supporting countries in creating ambitious climate goals and NDCs, and iii.) implementing LTS and NDCs through financial strategies and investment plans.

There is some evidence of the private sector playing a role in supporting refugee livelihoods and self-reliance in Uganda during the period 2016-2020. However, a number of evaluations and research reports highlight the potential for greater private sector involvement, if existing constraints are addressed. Key lessons identified in the literature include the need for more research, especially on market potential, to address the existing knowledge gaps on the role the private sector can play in supporting refugee livelihoods and self-reliance in Uganda. The literature notes that limited access to capital, as well as appropriate financing schemes, are key constraints to the growth of the agribusiness sector. Furthermore, access to natural resources required for agri-business, such as land and water needs to receive more attention from NGOs and donors. The evidence also shows that there is a need for guidelines on the monitoring and evaluation of humanitarian adaptations of market systems development programming. The literature also notes that local actors should be involved in the design and assessment of investment opportunities and risk of interventions to increase project impact.

1.1 Macroeconomic summary Economic recovery has consistently outperformed the technical staff’s expectations following a steep decline in activity in the second quarter of 2020. At the same time, total and core inflation rates have fallen and remain at low levels, suggesting that a significant element of the reactivation of Colombia’s economy has been related to recovery in potential GDP. This would support the technical staff’s diagnosis of weak aggregate demand and ample excess capacity. The most recently available data on 2020 growth suggests a contraction in economic activity of 6.8%, lower than estimates from January’s Monetary Policy Report (-7.2%). High-frequency indicators suggest that economic performance was significantly more dynamic than expected in January, despite mobility restrictions and quarantine measures. This has also come amid declines in total and core inflation, the latter of which was below January projections if controlling for certain relative price changes. This suggests that the unexpected strength of recent growth contains elements of demand, and that excess capacity, while significant, could be lower than previously estimated. Nevertheless, uncertainty over the measurement of excess capacity continues to be unusually high and marked both by variations in the way different economic sectors and spending components have been affected by the pandemic, and by uneven price behavior. The size of excess capacity, and in particular the evolution of the pandemic in forthcoming quarters, constitute substantial risks to the macroeconomic forecast presented in this report. Despite the unexpected strength of the recovery, the technical staff continues to project ample excess capacity that is expected to remain on the forecast horizon, alongside core inflation that will likely remain below the target. Domestic demand remains below 2019 levels amid unusually significant uncertainty over the size of excess capacity in the economy. High national unemployment (14.6% for February 2021) reflects a loose labor market, while observed total and core inflation continue to be below 2%. Inflationary pressures from the exchange rate are expected to continue to be low, with relatively little pass-through on inflation. This would be compatible with a negative output gap. Excess productive capacity and the expectation of core inflation below the 3% target on the forecast horizon provide a basis for an expansive monetary policy posture. The technical staff’s assessment of certain shocks and their expected effects on the economy, as well as the presence of several sources of uncertainty and related assumptions about their potential macroeconomic impacts, remain a feature of this report. The coronavirus pandemic, in particular, continues to affect the public health environment, and the reopening of Colombia’s economy remains incomplete. The technical staff’s assessment is that the COVID-19 shock has affected both aggregate demand and supply, but that the impact on demand has been deeper and more persistent. Given this persistence, the central forecast accounts for a gradual tightening of the output gap in the absence of new waves of contagion, and as vaccination campaigns progress. The central forecast continues to include an expected increase of total and core inflation rates in the second quarter of 2021, alongside the lapse of the temporary price relief measures put in place in 2020. Additional COVID-19 outbreaks (of uncertain duration and intensity) represent a significant risk factor that could affect these projections. Additionally, the forecast continues to include an upward trend in sovereign risk premiums, reflected by higher levels of public debt that in the wake of the pandemic are likely to persist on the forecast horizon, even in the context of a fiscal adjustment. At the same time, the projection accounts for the shortterm effects on private domestic demand from a fiscal adjustment along the lines of the one currently being proposed by the national government. This would be compatible with a gradual recovery of private domestic demand in 2022. The size and characteristics of the fiscal adjustment that is ultimately implemented, as well as the corresponding market response, represent another source of forecast uncertainty. Newly available information offers evidence of the potential for significant changes to the macroeconomic scenario, though without altering the general diagnosis described above. The most recent data on inflation, growth, fiscal policy, and international financial conditions suggests a more dynamic economy than previously expected. However, a third wave of the pandemic has delayed the re-opening of Colombia’s economy and brought with it a deceleration in economic activity. Detailed descriptions of these considerations and subsequent changes to the macroeconomic forecast are presented below. The expected annual decline in GDP (-0.3%) in the first quarter of 2021 appears to have been less pronounced than projected in January (-4.8%). Partial closures in January to address a second wave of COVID-19 appear to have had a less significant negative impact on the economy than previously estimated. This is reflected in figures related to mobility, energy demand, industry and retail sales, foreign trade, commercial transactions from selected banks, and the national statistics agency’s (DANE) economic tracking indicator (ISE). Output is now expected to have declined annually in the first quarter by 0.3%. Private consumption likely continued to recover, registering levels somewhat above those from the previous year, while public consumption likely increased significantly. While a recovery in investment in both housing and in other buildings and structures is expected, overall investment levels in this case likely continued to be low, and gross fixed capital formation is expected to continue to show significant annual declines. Imports likely recovered to again outpace exports, though both are expected to register significant annual declines. Economic activity that outpaced projections, an increase in oil prices and other export products, and an expected increase in public spending this year account for the upward revision to the 2021 growth forecast (from 4.6% with a range between 2% and 6% in January, to 6.0% with a range between 3% and 7% in April). As a result, the output gap is expected to be smaller and to tighten more rapidly than projected in the previous report, though it is still expected to remain in negative territory on the forecast horizon. Wide forecast intervals reflect the fact that the future evolution of the COVID-19 pandemic remains a significant source of uncertainty on these projections. The delay in the recovery of economic activity as a result of the resurgence of COVID-19 in the first quarter appears to have been less significant than projected in the January report. The central forecast scenario expects this improved performance to continue in 2021 alongside increased consumer and business confidence. Low real interest rates and an active credit supply would also support this dynamic, and the overall conditions would be expected to spur a recovery in consumption and investment. Increased growth in public spending and public works based on the national government’s spending plan (Plan Financiero del Gobierno) are other factors to consider. Additionally, an expected recovery in global demand and higher projected prices for oil and coffee would further contribute to improved external revenues and would favor investment, in particular in the oil sector. Given the above, the technical staff’s 2021 growth forecast has been revised upward from 4.6% in January (range from 2% to 6%) to 6.0% in April (range from 3% to 7%). These projections account for the potential for the third wave of COVID-19 to have a larger and more persistent effect on the economy than the previous wave, while also supposing that there will not be any additional significant waves of the pandemic and that mobility restrictions will be relaxed as a result. Economic growth in 2022 is expected to be 3%, with a range between 1% and 5%. This figure would be lower than projected in the January report (3.6% with a range between 2% and 6%), due to a higher base of comparison given the upward revision to expected GDP in 2021. This forecast also takes into account the likely effects on private demand of a fiscal adjustment of the size currently being proposed by the national government, and which would come into effect in 2022. Excess in productive capacity is now expected to be lower than estimated in January but continues to be significant and affected by high levels of uncertainty, as reflected in the wide forecast intervals. The possibility of new waves of the virus (of uncertain intensity and duration) represents a significant downward risk to projected GDP growth, and is signaled by the lower limits of the ranges provided in this report. Inflation (1.51%) and inflation excluding food and regulated items (0.94%) declined in March compared to December, continuing below the 3% target. The decline in inflation in this period was below projections, explained in large part by unanticipated increases in the costs of certain foods (3.92%) and regulated items (1.52%). An increase in international food and shipping prices, increased foreign demand for beef, and specific upward pressures on perishable food supplies appear to explain a lower-than-expected deceleration in the consumer price index (CPI) for foods. An unexpected increase in regulated items prices came amid unanticipated increases in international fuel prices, on some utilities rates, and for regulated education prices. The decline in annual inflation excluding food and regulated items between December and March was in line with projections from January, though this included downward pressure from a significant reduction in telecommunications rates due to the imminent entry of a new operator. When controlling for the effects of this relative price change, inflation excluding food and regulated items exceeds levels forecast in the previous report. Within this indicator of core inflation, the CPI for goods (1.05%) accelerated due to a reversion of the effects of the VAT-free day in November, which was largely accounted for in February, and possibly by the transmission of a recent depreciation of the peso on domestic prices for certain items (electric and household appliances). For their part, services prices decelerated and showed the lowest rate of annual growth (0.89%) among the large consumer baskets in the CPI. Within the services basket, the annual change in rental prices continued to decline, while those services that continue to experience the most significant restrictions on returning to normal operations (tourism, cinemas, nightlife, etc.) continued to register significant price declines. As previously mentioned, telephone rates also fell significantly due to increased competition in the market. Total inflation is expected to continue to be affected by ample excesses in productive capacity for the remainder of 2021 and 2022, though less so than projected in January. As a result, convergence to the inflation target is now expected to be somewhat faster than estimated in the previous report, assuming the absence of significant additional outbreaks of COVID-19. The technical staff’s year-end inflation projections for 2021 and 2022 have increased, suggesting figures around 3% due largely to variation in food and regulated items prices. The projection for inflation excluding food and regulated items also increased, but remains below 3%. Price relief measures on indirect taxes implemented in 2020 are expected to lapse in the second quarter of 2021, generating a one-off effect on prices and temporarily affecting inflation excluding food and regulated items. However, indexation to low levels of past inflation, weak demand, and ample excess productive capacity are expected to keep core inflation below the target, near 2.3% at the end of 2021 (previously 2.1%). The reversion in 2021 of the effects of some price relief measures on utility rates from 2020 should lead to an increase in the CPI for regulated items in the second half of this year. Annual price changes are now expected to be higher than estimated in the January report due to an increased expected path for fuel prices and unanticipated increases in regulated education prices. The projection for the CPI for foods has increased compared to the previous report, taking into account certain factors that were not anticipated in January (a less favorable agricultural cycle, increased pressure from international prices, and transport costs). Given the above, year-end annual inflation for 2021 and 2022 is now expected to be 3% and 2.8%, respectively, which would be above projections from January (2.3% and 2,7%). For its part, expected inflation based on analyst surveys suggests year-end inflation in 2021 and 2022 of 2.8% and 3.1%, respectively. There remains significant uncertainty surrounding the inflation forecasts included in this report due to several factors: 1) the evolution of the pandemic; 2) the difficulty in evaluating the size and persistence of excess productive capacity; 3) the timing and manner in which price relief measures will lapse; and 4) the future behavior of food prices. Projected 2021 growth in foreign demand (4.4% to 5.2%) and the supposed average oil price (USD 53 to USD 61 per Brent benchmark barrel) were both revised upward. An increase in long-term international interest rates has been reflected in a depreciation of the peso and could result in relatively tighter external financial conditions for emerging market economies, including Colombia. Average growth among Colombia’s trade partners was greater than expected in the fourth quarter of 2020. This, together with a sizable fiscal stimulus approved in the United States and the onset of a massive global vaccination campaign, largely explains the projected increase in foreign demand growth in 2021. The resilience of the goods market in the face of global crisis and an expected normalization in international trade are additional factors. These considerations and the expected continuation of a gradual reduction of mobility restrictions abroad suggest that Colombia’s trade partners could grow on average by 5.2% in 2021 and around 3.4% in 2022. The improved prospects for global economic growth have led to an increase in current and expected oil prices. Production interruptions due to a heavy winter, reduced inventories, and increased supply restrictions instituted by producing countries have also contributed to the increase. Meanwhile, market forecasts and recent Federal Reserve pronouncements suggest that the benchmark interest rate in the U.S. will remain stable for the next two years. Nevertheless, a significant increase in public spending in the country has fostered expectations for greater growth and inflation, as well as increased uncertainty over the moment in which a normalization of monetary policy might begin. This has been reflected in an increase in long-term interest rates. In this context, emerging market economies in the region, including Colombia, have registered increases in sovereign risk premiums and long-term domestic interest rates, and a depreciation of local currencies against the dollar. Recent outbreaks of COVID-19 in several of these economies; limits on vaccine supply and the slow pace of immunization campaigns in some countries; a significant increase in public debt; and tensions between the United States and China, among other factors, all add to a high level of uncertainty surrounding interest rate spreads, external financing conditions, and the future performance of risk premiums. The impact that this environment could have on the exchange rate and on domestic financing conditions represent risks to the macroeconomic and monetary policy forecasts. Domestic financial conditions continue to favor recovery in economic activity. The transmission of reductions to the policy interest rate on credit rates has been significant. The banking portfolio continues to recover amid circumstances that have affected both the supply and demand for loans, and in which some credit risks have materialized. Preferential and ordinary commercial interest rates have fallen to a similar degree as the benchmark interest rate. As is generally the case, this transmission has come at a slower pace for consumer credit rates, and has been further delayed in the case of mortgage rates. Commercial credit levels stabilized above pre-pandemic levels in March, following an increase resulting from significant liquidity requirements for businesses in the second quarter of 2020. The consumer credit portfolio continued to recover and has now surpassed February 2020 levels, though overall growth in the portfolio remains low. At the same time, portfolio projections and default indicators have increased, and credit establishment earnings have come down. Despite this, credit disbursements continue to recover and solvency indicators remain well above regulatory minimums. 1.2 Monetary policy decision In its meetings in March and April the BDBR left the benchmark interest rate unchanged at 1.75%.

Indonesia needs significant additional infrastructure investment to sustain its economic growth. However, the COVID-19 pandemic has further limited the fiscal space of the government. This report proposes a new method to increase infrastructure investment based on the concept of value capture. The report studies how Indonesia’s existing policies and regulations can be used to build a value capture framework that ensures the maximization of the social, economic, and environmental value of infrastructure investments. The framework focuses on strategies to deliver infrastructure projects that create greater value and, at the same time, generate funding for up-front investment.

The Government of Pakistan strongly supports public–private partnership (PPP) initiatives. From 1990 to 2019, Pakistan witnessed 108 financially closed PPP projects, with a total investment of approximately $28.4 billion. About 88% of these projects are in the energy sector, attracting more than $24.7billion, followed by investments in the port sector. In early 2021, Parliament approved the amendments to the 2017 PPP Law, enacting the Public Private Partnership Authority (Amendment) Act 2021. This further strengthens the enabling legal and regulatory framework for developing and implementing PPPs, thereby promoting private sector investment in public infrastructure and related services.