Home 
Publications Online Publications Document
|
Financial Management and Analysis of Projects : 3. Preparing and Appraising Investment Project
3.7.2. Project Preparatory Technical Assistance Stage3.7.2.1. A critical element of preparation is identifying and comparing technical and institutional (and financial) alternatives for achieving the project's objectives. Preparation typically requires feasibility studies that identify and prepare preliminary designs of technical and institutional alternatives; compare respective costs and benefits; and examine the most viable option from technical, financial, and economic viewpoints. 3.7.2.2. The above assessments for project financial sustainability and viability as well as financial management capacity should generally be performed during ADB's PPTA stage (but checks should be made for any changes in project cycle or definitions to the "Business Processes for the Reorganized ADB"). As such, the financial analyst must thoroughly review the PPTA TORs to ensure that they reflect these requirements. 3.7.2.3. For the financial analyst, to contribute to the RRP, this means researching possible first-stage project costs, working with technical experts to prepare cost estimates (including rough contingencies) and preparing initial cost analyses. To support this work, the financial analyst should review the prospective EA's capacity to develop and maintain adequate project/EA accounts, and the availability of suitable auditing skills to provide timely audit reports and opinions. 3.7.2.4. If the preliminary review indicates that the project appears "bankable" and addresses sector priorities, the necessary data to support detailed technical, financial, and economic analyses of alternative options should be collected and analyzed. This step should identify a preferred option, for which an indepth feasibility analysis will be conducted and a preliminary project design prepared. The preliminary design will be reviewed by ADB staff and, when finalized, will provide the basis for design studies. ADB staff will appraise these studies. It is important for ADB to ensure that the preparation report format conforms to the RRP format and contains all information required for appraisal. 3.7.2.5. To assess the viability and sustainability of the project, internal ADB reviewers (that may include a Management Review Meeting (MRM) and a Staff Review Committee (SRC)) will, among other things, examine and consider: (i) the realism of the project cost estimates; (ii) the realism of the financing plan (which must indicate the contributions of the beneficiaries, ADB and the cofinanciers, if any); (iii) the soundness of the proposed accounting and internal control procedures; (iv) the workability of organizational arrangements for project implementation, as well as monitoring and evaluation mechanisms; and (v) the realism and implications of the financial, economic, and risk analyses. 3.7.2.6. In cases where the borrower has asked ADB (or other agencies) to assist in project preparation, the financial analyst's responsibilities will depend on the skill and experience of those who have prepared the project's financial aspects. At a minimum, the analyst is expected to ensure that all issues are examined comprehensively and that proposed solutions are realistic, and to report accordingly.
|
RSS Feeds
Back
Top of page