EAP Task Force
Handbook for Appraisal of
Environmental Projects Financed from
Public Funds
Nelly Petkova
Paris, 22 February 2007
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Structure of the Presentation
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Objectives of the Handbook
Scope of the Handbook
Target audience
Structure of the Handbook
Golden rule for providing public support for
investments
• Major principles identified in the Handbook
• Essential management tools identified in
the Handbook
• Training on the Handbook
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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
institution
– 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
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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
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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,
consultants
• NOT project developers, private financiers, IFIs
• Focus on the needs of transition economies of CEE
and EECCA but relevant for countries from other
regions
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Structure of the Handbook
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Programming and setting the rules of the expenditure
programme
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Project identification and appraisal
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Main elements of the programme
Priority-setting
Preparing financial plans and budgets
Institutional issues
Project identification
Processing of applications
Eligibility screening (pre-appraisal)
Full appraisal and ranking
Selection
After-project selection
– Contracting and financial transfers
– Project implementation and post-implementation monitoring
and evaluation
– Cash-flow and loan-portfolio management
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Golden Rule for Providing Public
Support to Investments
Project
Characteristics
Economic
Efficiency
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Viability/Efficiency
Yes
No
Yes
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No
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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
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Core principles for sound project
appraisal
• 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
information
– Use simple assessment techniques (costeffectiveness vs cost-benefit, multi-criteria
analysis)
– Decisions are explained on time
– Active project identification
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Core principles for sound project
appraisal
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A two-step appraisal process is preferable
– it saves time and resources to both applicants and the agency
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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
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Applicants, not only projects, should be evaluated
The process does not stop once a decision is made
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contracting
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
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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)
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Training on the Handbook
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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
Objectives
– to provide Moldovan managers with practical knowledge and
tools
– 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
area?
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