EAP Task Force Handbook for Appraisal of Environmental Projects Financed from Public Funds

EAP Task Force
Handbook for Appraisal of
Environmental Projects Financed from
Public Funds
Nelly Petkova
Paris, 22 February 2007
EAP Task Force
Structure of the Presentation
Objectives of the Handbook
Scope of the Handbook
Target audience
Structure of the Handbook
Golden rule for providing public support for
• Major principles identified in the Handbook
• Essential management tools identified in
the Handbook
• Training on the Handbook
EAP Task Force
Objectives of the Handbook
• To show how to implement the Good Practices for
Public Environmental Expenditure Management
(PEEM) in programming and project cycle
management by public institutions
• To show what, why, and how it should be done
• The Handbook does not intend to deliver a
complete, "ready-to-use" toolkit that could be
directly applied by any environmental financing
– A practical, step-by-step approach to different
challenges and a menu of options
– Based on available tools and practices from some of
the most successful and internationally-recognised
government authorities and public financial agencies
EAP Task Force
Scope of the Handbook
• Good practices in appraising, selecting and
financing of projects supported by domestic
public agencies
• NOT project preparation/development
• Good practices in setting expenditure
programmes and priority-setting
• Focused on investment projects in the
wastewater collection and treatment sector
EAP Task Force
Target Audience
• Agencies implementing public environmental
investment expenditure programmes
• Governments (MoE) designing public environmental
expenditure programmes and supervising
implementing agencies
• Managers of technical assistance programmes,
• NOT project developers, private financiers, IFIs
• Focus on the needs of transition economies of CEE
and EECCA but relevant for countries from other
EAP Task Force
Structure of the Handbook
Programming and setting the rules of the expenditure
Project identification and appraisal
Main elements of the programme
Preparing financial plans and budgets
Institutional issues
Project identification
Processing of applications
Eligibility screening (pre-appraisal)
Full appraisal and ranking
After-project selection
– Contracting and financial transfers
– Project implementation and post-implementation monitoring
and evaluation
– Cash-flow and loan-portfolio management
EAP Task Force
Golden Rule for Providing Public
Support to Investments
EAP Task Force
Core principles to set up an environmental
expenditure programme
• Set few and unambiguous priorities
– environmental media, economic sector, or region
– clear, time-bound, measurable objectives
• Define eligibility criteria
– types of projects
– projects owners
– eligible types of costs which will be supported
• Assign revenue sources for the programme
– disbursement mechanisms
– the assistance rate per type of project or beneficiary
• Define the application cycle (time-bound versus ongoing)
• Consult with stakeholders
 THEN, consider the most appropriate institutional setup for the implementing agency
EAP Task Force
Core principles for sound project
• Programming vs Appraisal
– A political process, focused on defining goals,
objectives and priorities and setting the rules for
the project cycle
– A technical process, conducted by professional
staff, held accountable for their decisions
• Transparency
– Information should be disseminated widely
– All potential applicants have equal access to
– Use simple assessment techniques (costeffectiveness vs cost-benefit, multi-criteria
– Decisions are explained on time
– Active project identification
EAP Task Force
Core principles for sound project
A two-step appraisal process is preferable
– it saves time and resources to both applicants and the agency
The financial sustainability of the project should be checked
– bankable projects do not need public support
– not sustainable projects should be rejected as well
– data provided by applicants should be carefully checked
Applicants, not only projects, should be evaluated
The process does not stop once a decision is made
monitoring project implementation
assessing project outcomes
learn from experience
Attracting qualified and experienced staff is key
– to challenge project owners
– to facilitate project preparation
– to manage project cycle
EAP Task Force
Essential management tools
• An information package for applicants
– the agency’s mission, priorities, and eligibility criteria
• A questionnaire for eligibility screening
– along with instructions to applicants and a checklist for staff
• A full application form, along with
– instructions to applicants on how to fill it in
– instructions to staff on how to use the information and data
provided in the project proposals
• Methodological guidelines for staff for conducting a costeffectiveness analysis
• A project fiche, to synthesise information and to report to
the decision-making body
• A manual of operational rules and procedures for staff
• A database for project cycle management (modular)
EAP Task Force
Training on the Handbook
First training delivered to Moldovan experts
– a 4-day workshop, January 2007
– support by the Moldovan Ministry of Environment, REC
Moldova and the UK DEFRA
– to provide Moldovan managers with practical knowledge and
– to test the tools and approaches in the Handbook
– to identify room for improvement
Training support
– a mix of lectures and practical exercises
– Toolkit and a computer model for calculating cost-effectiveness
– training by practitioners with hands-on experience
Additional on-the-job training needed
Will there be demand for these tools in EECCA?
Will there be interest by donors to support additional work in this
EAP Task Force