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JASPERS in the Environment, Energy and Municipal Sectors Cost – Benefit Analysis PowerPoint PPT Presentation


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JASPERS in the Environment, Energy and Municipal Sectors Cost – Benefit Analysis. Prague, 28 th November 2007. Components and Key Issues of CBA. Purpose of Cost Benefit Analysis Identify sustainability and viability issues; Optimise scope of the project and its individual components;

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JASPERS in the Environment, Energy and Municipal Sectors Cost – Benefit Analysis

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Jaspers in the environment energy and municipal sectors cost benefit analysis

JASPERS in the Environment, Energy and Municipal Sectors

Cost – Benefit Analysis

Prague, 28th November 2007


Components and key issues of cba

Components and Key Issues of CBA

  • Purpose of Cost Benefit Analysis

    • Identify sustainability and viability issues;

    • Optimise scope of the project and its individual components;

    • To determine level of support realisable from EU Cohesion Fund;

  • Methodology requirements and Jaspers involvement

    • Outlined in Working Document 4 with some changes made to previous guidelines;

    • Advice on interpretation of guidelines;

    • Review and assistance in the preparation of cost – benefit analysis


Type of past jaspers involvement

Type of Past JaspersInvolvement

  • Methodology Queries

    • Preparation of CBA guidelines in Romania and Bulgaria;

    • Update of guidelines in Poland;

    • Methodology guidelines for demand and risk assessment in Slovakia;

    • Questions concerning interpretation of guidelines

  • Preparation of CBA

    • Support in ensuring most appropriate option is selected;

    • Review and advice on optimisation of EU grant contribution and calculation of the contribution;

    • Advice on wider affordability and sustainability issues and methods to improve project sustainability;


Key issues lower sustainability

Key Issues : Lower Sustainability

  • EU compliance requirements

    • Wastewater : services to populations above 2,000;

    • Wastewater : higher degree of treatment and sludge management issues;

    • Solid waste : landfill rehabilitation and diversion requirements;

    • Energy : focus of carbon reduction and efficiency

  • Issues

    • Higher costs of the project with impact on affordability;

    • Changes in the methodology in particular the calculation of the EU grant element;

    • Less tangible benefits reducing economic benefits;


Key issues reduced funding gap

Key Issues : Reduced Funding Gap

  • Change in methodology with inclusion of maximum co-funding rate fixed for the priority axis

    • EU Grant = Decision Amount * Maximum Co-Funding Rate

    • The inclusion of Maximum rate reduces the funding amount, but project scope means that greater financial sustainability issues should arise;

  • Project options to overcome issues

    • Ensuring optimum calculation of incremental revenue with complexities associated with common tariff levels;

    • Establishing adequate basis for calculation of incremental operating costs

    • Ensuring cost eligibility;

    • Identification and optimisation of additional sources of finance to support EU grant;


Concluding remarks

Concluding Remarks

  • CBA is central to the feasibility study and application process

    • Assists in optimising the project

    • Provides the basis for determining level of EU financing support;

  • Projects are excepted to be less sustainable

    • Higher cost projects owing to development status and EU compliance needs;

    • Change in methodologies mean that lower EU financial support can be expected;

  • Jaspers assistance;

    • To improve project financial, cost and economic sustainability;

    • Ensure that best practices are applied in project evaluation and comply with EU evaluation needs;


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