Appraisal Techniques of Public Investments and Projects

Topics: Investment, Net present value, Millennium Development Goals Pages: 316 (62980 words) Published: March 26, 2013
Ministry of Finance and Economic Planning
National Development Planning Directorate
Public Investment Technical Team Unit

Capacity Building to Support the Rwanda
Public Investment Program
Investment Appraisal Training Manual for
Government Staff

Prepared by
Sulaiman Kyambadde
P.O. Box 1851 Kigali, Rwanda
Tel: +250 255114413 (office)

October 2011
The purpose of this Training Manual is to help PITT implement the use of international best practices of Investment Appraisal techniques in its programming of public sector investments. It describes how public sector investments should be assessed at conception or programming stage. The modules introduce the basic concepts behind the appraisal techn iques and their applicability in the Rwandan context. It describes the DCF methodology, the shadow pricing methodology and performance measures and decision criteria, together with financial and economic analysis techniques. By their very nature, public projects involve benefits and costs to society over a number of years into the future, unfortunately, market prices and investment outcomes cannot be predicted with certainty. The manual also introduces qualitative analysis concepts of investments.

Author
Mr. Sulaiman Kyambadde, is an economist, and a business and development consultant working with PPM Consulting Limited. PPM Consulting is a local management and development consulting firm with headquarters in Kigali, the nation’s capital. In addition, officials from the Ministry of Finance and Economic Planning provided invaluable input on government priorities and requirements to complete the manual.

Disclaimer
The Training Manual is made possible by the support of PITT management and staff. The contents of this manual are the sole responsibility of the author and do not necessarily reflect the views of the Ministry of Finance and Economic Planning or the Government of Rwanda.

Investment Appraisal Training Manual for Public Projects

Investment Appraisal Training Manual

Table of contents
Author ....................................................................................................................................................1 Disclaimer .............................................................................................................................................1 Table of contents ..................................................................................................................................2 1.

Overview of the manual ..........................................................................................................4 1.1 Purpose of the manual .............................................................................................................4 1.2 Quality management ................................................................................................................5 1.3 Content ........................................................................................................................................5 1.4 How to use the manual ............................................................................................................6 2.

Module 1: Public investment management .........................................................................8 2.1 Investment cycle management ...............................................................................................8 2.2 Planning and management tools ...........................................................................................9 2.3 Government requirements ....................................................................................................12 3.

Module 2: Discounted cash flow methodology ................................................................21 3.1 Introduction and overview ...................................................................................................21 3.2 Cash flows, compounding and...

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