Download harmonisation of environmental expenditure information

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
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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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