The Economic Appraisal of Investment Pr
          The Economic Appraisal of 
ojects at the EIB Investment Projects at the EIB
V        Version March 2013 – Under review
ersion Mar
ch 2013 – Under r
eview
                       European Investment Bank                              The Economic Appraisal of Investment Projects at the EIB 
                                                                             
                                                                             
                                                                                                                
                                                                             
                                                                             
                                                                             
                                                                             
                                        The Economic Appraisal of 
                                    Investment Projects at the EIB 
                                                                             
                                                                             
                                                         Projects Directorate 
                                                                             
                                                                 March 2013 
                                                              (Under review) 
                                                                             
                                                                             
                       30/10/2020 – Note to the Reader 
                        
                       The EIB Projects Directorate conducts technical and economic appraisal of the projects 
                       financed by the Bank, and JASPERS includes economic appraisal in its project preparation 
                       assistance. Economic appraisal plays a central role in the operations of the EIB. It allows the 
                       Bank to judge whether an investment project will contribute to the economic growth and 
                       cohesion of the EU and the economic progress of its partners. 
                        
                       This guide, which was published in April 2013 in the EIB website, illustrates how the Bank 
                       conducts economic appraisal across the sectors of the economy where it operates. 
                        
                       The transformation of the EIB into the EU Climate Bank, as well as research advances in some 
                       of the elements of the appraisal require that the guide be revised. Amongst some of the 
                       elements requiring revision there are: the cost of carbon, the value of time (VoT) in transport 
                       and the value of transport safety. 
                        
                       This version under review provides links to updated documents for their use until the 
                       new version of the guide is available by end of 2021 at the latest. 
                        
                        
                        
                       30 October 2020                                                                               page 1 / 211 
                       European Investment Bank                              The Economic Appraisal of Investment Projects at the EIB 
                                                                             
                                  Table of Contents 
                        
                          List of Abbreviations and Acronyms ....................................................................................... 3
                                                                                                                                  
                          Contributors ............................................................................................................................ 6 
                          Foreword  8 
                          1             Introduction ......................................................................................................... 9 
                          PART 1: METHODOLOGY TOPICS: CROSS-SECTOR .................................................... 14 
                          2             Financial and Economic Appraisal ................................................................... 15 
                          3             Defining the Counterfactual Scenario ............................................................... 20 
                          4             Incorporating Environmental Externalities ........................................................ 24 
                          5             Land Acquisition and Resettlement .................................................................. 28 
                          6             Wider Economic Impacts .................................................................................. 31 
                          7             Economic Life and Residual Value ................................................................... 41 
                          8             The Social Discount Rate ................................................................................. 44 
                          9             Multi-Criteria Analysis (MCA) ........................................................................... 53 
                          10            Risk Analysis and Uncertainty .......................................................................... 66 
                          PART 2: METHODOLOGY TOPICS: SECTOR-SPECIFIC................................................. 72 
                          11            Security of Energy Supply ................................................................................ 73 
                          12            The Value of Time in Transport ........................................................................ 79 
                          13            The Value of Transport Safety ......................................................................... 81 
                          14            Road Vehicle Operating Costs ......................................................................... 82 
                          15            Traffic Categories in Transport ......................................................................... 84 
                          16            Risk-Reduction Analysis in Water .................................................................... 92 
                          PART 3: SECTOR METHODS AND CASES ...................................................................... 97 
                          17            Education and Research .................................................................................. 98 
                          18            Renewable Energy ......................................................................................... 106 
                          19            Electricity Network Infrastructure .................................................................... 110 
                          20            Energy Efficiency and District Heating ........................................................... 115 
                          21            Health ............................................................................................................. 118 
                          22            Private Sector Research, Development and Innovation (RDI) ....................... 125 
                          23            Software RDI .................................................................................................. 132 
                          24            Research Infrastructure .................................................................................. 137 
                          25            Manufacturing Capacity .................................................................................. 142 
                          26            Telecommunications ....................................................................................... 146 
                          27            Biofuel Production .......................................................................................... 156 
                          28            Tourism ........................................................................................................... 160 
                          29            Interurban Railways ........................................................................................ 165 
                          30            Roads ............................................................................................................. 171 
                          31            Urban Public Transport................................................................................... 178 
                          32            Airports ........................................................................................................... 182 
                          33            Seaports ......................................................................................................... 186 
                          34            Regional and Urban Development ................................................................. 189 
                          35            Public Buildings .............................................................................................. 196 
                          36            Solid Waste Management .............................................................................. 201 
                          37            Water and Wastewater ................................................................................... 205 
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