Financing a Sustinable Transition
Funded by the European Union. Views and opinions expressed are however those of the author(s) only and do not necessarily reflect those of the European Union or the European Education and Culture Executive Agency (EACEA). Neither the European Union nor EACEA can be held responsible for them.
This work is licensed under a Creative Commons Attribution 4.0 International License.
TABLE OF CONTENTS
WHY ARE WE TALKING ABOUT SUSTAINABLE TRANSITION?
HOW SUSTAINABLE FINANCE EVOLVES?
THE FINANCE SECTOR PLAYS A VITAL ROLE IN SUSTAINABILITY
INTEGRATION OF ESG INTO FINANCIAL DECISIONS
EU FUNDING TOWARDS CARBON NET ZERO AND SUSTAINABILITY
PROJECTS FEASIBILITY AND STUDY CASES
1. INTRODUCTION
In this course you will learn about sustainable financing, the role it plays in promoting sustainability actions and the available financing instruments. Also, you will have real cases of study of the economic projects feasibility as a required evaluation to apply for funding.
- A good overview about sustainable finance evolution
- Identify the role of finantial sector to foster sustainability actions
- Basic knowladge to calculate the project economic feasibility
WHY ARE WE TALKING ABOUT SUSTAINABLE TRANSITION?
Why are we talking about sustainable transition? The world is facing multiple crises from climate change to biodiversity collapse as well as social challenges such as urbanization and migration due to the following among other crisis.
Conventional approaches have made limited progress in resolving these grand challenges, therefore we need an effective transition.
WHY ARE WE TALKING ABOUT SUSTAINABLE TRANSITION?
One of the biggest challenges of sustainable transition is financing Sustainable financing is an umbrella term for any financial activity (loans, investments, and others) that take into account environmental, social, and governance (ESG) factors. To deliver the objectives of UN SDGs and Climate actions under Paris Agreement, it is necessary that finance and financial services be provided to support, enable, and encourage companies, organisations, countries, and individuals to transition toward those objectives.
HOW SUSTAINABLE FINANCE EVOLVES?
How sustainable finance evolves? In 1992, at the Earth Summit in Rio de Janeiro a group of visionary leaders saw that transforming private finance would be key to achieving sustainable development.
Source: : https://www.unepfi.org/news/timeline/
THE FINANCE SECTOR PLAYS A VITAL ROLE IN SUSTAINABILITY
The finance sector plays a vital role in driving sustainabilit
Funding companies and activities with positive impact.
01
02
Developing new financial instruments
Supporting or calling government to take further action.
03
THE FINANCE SECTOR PLAYS A VITAL ROLE IN SUSTAINABILITY
The finance sector has a vital role to play
Sustainable finance refers to the process of taking environmental, social and governance (ESG) considerations into account when making investment decisions in the financial sector, leading to more long-term investments in sustainable economic activities and projects.
Positive influence on companies and other actors
Providing capital
Supporting government efforts
THE FINANCE SECTOR PLAYS A VITAL ROLE IN SUSTAINABILITY
Mitigating climate risks as a key driver for sustainable business growth
There are two types of risks:
The material sustainability factors:
Examples: Those which can damage properties, and affect supply chains, and therefore disrupt production in the long term.
They may have a significant impact (negative or positive) on a company/organisation long term life or its business.
Examples of these risks include the possible implementation of a carbon tax, carbon disclosure mandates, or the transition to renewable energies.
Transition
Risks
Physical
Risks
Source: https://www.persefoni.com/learn/climate-risk-what-are-physical-transition-risks
THE FINANCE SECTOR PLAYS A VITAL ROLE IN SUSTAINABILITY
Sustainability criteria at the forefront of organizations decision-making There are several reasons companies/organisations consider sustainability criteria and risks in their decision making processes:
THE FINANCE SECTOR PLAYS A VITAL ROLE IN SUSTAINABILITY
Sustainability as value generation in the organizations ....
1.Top-line growth
info
info
2. Cost reductions
Value generation by adopting an ESG strategy in the organisation is seen on five main drivers
3. Regulatory and legal interventions
info
4. Productivity uplift
info
5. Investment and asset optimization
info
INTEGRATION OF ESG INTO FINANCIAL DECISIONS
Integration of ESG into financial decisions
Find more information in minicourse : Sustainability Fundaments
INTEGRATION OF ESG INTO FINANCIAL DECISIONS
The decisions are related to take action for example in climate change
Find more information in minicourse : Sustainability Fundaments
INTEGRATION OF ESG INTO FINANCIAL DECISIONS
The financial decisions are supported by financial organisations Financial organisations have compiling reasons and a key role to play:
EU FUNDING TOWARDS CARBON NET ZERO AND SUSTAINABILITY
EU is financing the sustainable transition
EU FUNDING TOWARDS CARBON NET ZERO AND SUSTAINABILITY
Taxation supporting the sustainable transition
Info
Source: Eurostat (https://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=env_ac_tax&lang=en)
EU FUNDING TOWARDS CARBON NET ZERO AND SUSTAINABILITY
The European Green Deal contribution
- Fresh air, clean water, healthy soil, and biodiversity
- Renovated, energy-efficient buildings
- Healthy and affordable food
- More public transport
- Cleaner energy and cutting-edge clean technological innovation
- Longer-lasting products that can be repaired, recycled, and re-used
- Future-proof jobs and skills training for the transition
- Globally competitive and resilient industry
EU FUNDING TOWARDS CARBON NET ZERO AND SUSTAINABILITY
Funding to target resources related to the transition in Educational & Training (VET)
- Equip learners and educators with the knowledge, skills and attitudes needed for a greener and more sustainable economy and society.
- Help education and training institutions to integrate sustainability into teaching and learning and across all aspects of their operations.
EU FUNDING TOWARDS CARBON NET ZERO AND SUSTAINABILITY
Financial resources are instrumental to achieve sustainable ambitions The Organization Strategy should be designed to ensure the long term financial of the organisation, including sustainability as a sub-strategy.
Funding for sustainable initiatives may come from:
- Incorporating sustainability and the environment into the revenue planning round, the capital investment process.
- Policy instruments can offer incentives, both financial and non-financial (e.g. labels), encouraging VET stakeholders to take action towards a greener and more circular economy.
- Institutional programmes, national and European governmental sources.
- Financial support from charity funds and third-party research among other forms of financial support.
EU FUNDING TOWARDS CARBON NET ZERO AND SUSTAINABILITY
Funding to finance the green transition in VET For example in France, the national network of Centres of Vocational Excellence focused on the energy transition and eco-industry (Les centres d’excellence Campus des Métiers et des Qualifications de la filière «Transition énergétique, éco-industrie») combine national and regional funding as well as company resources to target resources on a key sector related to the green transition.
Through investments in mainly technological and educational equipment and resources, they offer VET programmes to develop the skills and qualifications of young people while promoting the competitiveness of companies, thus boosting the creation of qualified jobs and strengthening the quality of VET qualifications.
EU FUNDING TOWARDS CARBON NET ZERO AND SUSTAINABILITY
Catalysing local actions through a national strategic approach to funding VET Several funding pools have been created to support local actors in greening VET. The aim is for the funds to act as a catalyst in the development of lasting practices that can serve as an inspiration to others. (See below some examples in Denmark)
Investment in equipment and associated skills development related to carbon reduction in the target sectors of agriculture and food, technology, construction and transport.
Another funding pool focuses on strengthening youth education’s work on green entrepreneurship. The pool is intended to provide students with a broader insight into and experience with green entrepreneurship Funding pool for the development and testing of teaching courses on vocational training about within the green transition and sustainability.
PROJECTS FEASIBILITY AND STUDY CASES
Five steps to apply for financing
step 4 Reporting
step 3 monitoring
step 2 selection
step 1 Definition
step 5 VERIFication
step 1
Impact report of the project to inform the investor.
Duis autem vel eum iriure dolor in hendrerit in
Framework
Presenting the project and Feasibility.
Monitoring of funds raised for the project
Evaluation by ESG experts
This is the last step By external review
+info
+info
PROJECTS FEASIBILITY AND STUDY CASES
Projects feasibility Through feasibility study, projects can be determined if feasible/viable from the marketing and technical viewpoints. Given their estimated capital and operation costs (CAPEX & OPEX), projects can also be determined whether profitable or not. The Life Cycle Cost Analysis (LCC) is used to assess the economic feasibility of the product/service/ project. It allows you to answer some questions like:
- How much does it cost to produce 1 Kg or 1 ton of my product?
- Is my product price-competitive compared to my competitors?
- Is my project producing benefits from year 2, 3, 6…?
- Will my project be profitable in a long-term perspective?
- Where may I start optimising the production process?
PROJECTS FEASIBILITY AND STUDY CASES
Data Inventory to perform the LCC analysis
PROJECTS FEASIBILITY AND STUDY CASES
Costs involved to the analysis
Net present value (NPV) is used to calculate the current value of a future stream of payments from a project, or investment. NPV is used to determine whether or not an investment, project, or business will be profitable down the line
Capex: Capital Expenditure Opex : Operational Expenditure
PROJECTS FEASIBILITY AND STUDY CASES
Study Case 1 – Illumination at School A school would like to choose a light bulb for one of its offices. They want the bulb to work 10.000 h.
You will evaluate two alternatives:
A. To buy 100W incandescent bulb
B. To buy 25W compact fluorescent bulb
Which one do you choose and why
PROJECTS FEASIBILITY AND STUDY CASES
Study Case 1 - Illumination at School costs This analysis shows clearly that each incandescent bulb replaced with a CFL would save 300 € over 10,000 hours of operation. Imagine the number of bulbs that you have at your school/organisation, now calculate how much would you save?
PROJECTS FEASIBILITY AND STUDY CASES
Embracing sustainability as a business model... Like any investment one organisation makes, the potential return on an investment (ROI) in sustainability should be considered before making the investment. The ROI Model for Sustainability typically defines and tracks results in 4 categories:
Sustainable businesses can all increase their market share by using sustainability as a competitive advantage. In some cases, sustainability will allow you to bid on business and contracts
PROJECTS FEASIBILITY AND STUDY CASES
Study Case 2 –Reusing wastewater at University Campus Covenant University (CU) community in Nigeria, generates over 800,000 litres of wastewater per day. Effluent of the treated wastewater is discharged into a gully that drains into River Iju (River Atuwara). Schematic diagram below shows the approach followed to economically justify the wastewater recycling proposal as a complementary water source to the currently groundwater source.
source: urce: D.O. Omole1 et al,. 2019 Available online: https://iopscience.iop.org/article/10.1088/1742-6596/1299/1/012125
PROJECTS FEASIBILITY AND STUDY CASES
Study Case 2 – Cost of action The wastewater treatment system will involve the construction of the following:
- Constructed wetland expansion
- Overhead steel tank 3.
- Underground water storage: The total volume of concrete used to construct the tank used for this project is 254m3 and the internal volume of the tank is 496m3 .
- An artificial river (sub-projects )
- A car wash (sub-projects)
The treated water can be used for flushing, irrigation etc. However, subprojects have been proposed that would generate revenue for the University:
source: urce: D.O. Omole1 et al,. 2019 Available online: https://iopscience.iop.org/article/10.1088/1742-6596/1299/1/012125
PROJECTS FEASIBILITY AND STUDY CASES
Study Case 2- Value of costs incurred over time as a result of the reuse scheme The Capital Expenditure (CAPEX), and Operating Expenditure (OPEX) for the proposed project were calculated.
The currency NGN was converted to Euros (05 of Sept. 2023)
A discount rate (r) of 14% was used.
source: urce: D.O. Omole1 et al,. 2019 Available online: https://iopscience.iop.org/article/10.1088/1742-6596/1299/1/012125
PROJECTS FEASIBILITY AND STUDY CASES
Study Case 2 - Cost of no action The cost of no action can be interpreted as the benefits not achieved if the wastewater is disposed indiscriminately without reuse. The Energy saving potentials of reusing wastewater: Table above shows a comparison between total dependence on groundwater sources versus dependence on recycled water.
When recycled water is used to complement the existing ground water source, the cost of energy per day is only about 49% of the cost of relying completely on ground water sources.
source: urce: D.O. Omole1 et al,. 2019 Available online: https://iopscience.iop.org/article/10.1088/1742-6596/1299/1/012125
PROJECTS FEASIBILITY AND STUDY CASES
Study Case 2 - Value of benefits derived from wastewater recycling
The currency NGN was converted to Euros (05 of Sept. 2023)
A discount rate (r) of 14% was used.
source: urce: D.O. Omole1 et al,. 2019 Available online: https://iopscience.iop.org/article/10.1088/1742-6596/1299/1/012125
PROJECTS FEASIBILITY AND STUDY CASES
Study case 2 - Net present value is computed The value A, represents the net cash flow for a particular year and T is the number of periods or years in consideration.
source: urce: D.O. Omole1 et al,. 2019 Available online: https://iopscience.iop.org/article/10.1088/1742-6596/1299/1/012125
PROJECTS FEASIBILITY AND STUDY CASES
Study Case 2 – Feasibility Conclusion With a discount rate of 14 %, the projected cash flows are worth 760636 € which is greater than the initial 709678 € invested into the projects. The resulting NPV of the projects is 50958 €, positive value which indicates that pursuing the above projects may be optimal for CU University in Nigeria .
source: urce: D.O. Omole1 et al,. 2019 Available online: https://iopscience.iop.org/article/10.1088/1742-6596/1299/1/012125
4. CONCLUSIONS
- Sustainable finance refers to the process of taking environmental, social and governance (ESG) considerations into account when making investment decisions in the financial sector, leading to more long-term investments in sustainable economic activities and projects.
- Value generation by adopting an ESG strategy in the organisation is seen on five main drivers: Top-line growth,cost reductions, regulatory interventions, productivity uplift and investment or optimization.
- Regarding Economical feasibility, NPV is used to determine whether or not an investment, project, or business will be profitable down the line.
5. Let's practice what we've learned!
QUIZ TIME
EVERGREEN QUIZ
Quiz
Financing a Sustainable Transition
EVERGREEN QUIZ
QUESTION 1/5
The sustainable finance takes into account?
Environmental, social, and governance (ESG) factors of an economic activity or project.
Economical KPIs
Biodiversity conservation
EVERGREEN QUIZ
RIGHT!
NEXT QUESTION
EVERGREEN QUIZ
QUESTION 2/5
Sustainability is a subject rising on the agenda of the financial services sector?
Only the Economical factors
No
Yes
EVERGREEN QUIZ
RIGHT!
NEXT QUESTION
EVERGREEN QUIZ
QUESTION 3/5
Feasibility studies also help project managers and stakeholders?
Determine the viability of the project
To prioritize cost and profitability over other goals
Reach environmantal goals
EVERGREEN QUIZ
RIGHT!
NEXT QUESTION
EVERGREEN QUIZ
QUESTION 4/5
Economic feasibility provides detailed information about:
Project spending and expected revenue
water and mineral costs
Environmental impacts and economical risks
EVERGREEN QUIZ
RIGHT!
NEXT QUESTION
EVERGREEN QUIZ
QUESTION 5/5
What kind of feasibility measures cost-effectiveness of a project or solution?
Green feasibility
Economic feasibility
Strategic feasibility
EVERGREEN QUIZ
RIGHT!
NEXT QUESTION
EVERGREEN QUIZ
1-2Correct
5Correct
3-4Correct
0Correct
Please read the minicourse.
Please read the minicourse.
Congratulations!
We advise you to read carefully the quiz
6. REFERENCES
Books/Papers/Articles
Further reading
Funded by the European Union. Views and opinions expressed are however those of the author(s) only and do not necessarily reflect those of the European Union or the European Education and Culture Executive Agency (EACEA). Neither the European Union nor EACEA can be held responsible for them.
This work is licensed under a Creative Commons Attribution 4.0 International License.
Financing a Sustainable Transition
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Financing a Sustinable Transition
Funded by the European Union. Views and opinions expressed are however those of the author(s) only and do not necessarily reflect those of the European Union or the European Education and Culture Executive Agency (EACEA). Neither the European Union nor EACEA can be held responsible for them.
This work is licensed under a Creative Commons Attribution 4.0 International License.
TABLE OF CONTENTS
WHY ARE WE TALKING ABOUT SUSTAINABLE TRANSITION?
HOW SUSTAINABLE FINANCE EVOLVES?
THE FINANCE SECTOR PLAYS A VITAL ROLE IN SUSTAINABILITY
INTEGRATION OF ESG INTO FINANCIAL DECISIONS
EU FUNDING TOWARDS CARBON NET ZERO AND SUSTAINABILITY
PROJECTS FEASIBILITY AND STUDY CASES
1. INTRODUCTION
In this course you will learn about sustainable financing, the role it plays in promoting sustainability actions and the available financing instruments. Also, you will have real cases of study of the economic projects feasibility as a required evaluation to apply for funding.
WHY ARE WE TALKING ABOUT SUSTAINABLE TRANSITION?
Why are we talking about sustainable transition? The world is facing multiple crises from climate change to biodiversity collapse as well as social challenges such as urbanization and migration due to the following among other crisis. Conventional approaches have made limited progress in resolving these grand challenges, therefore we need an effective transition.
WHY ARE WE TALKING ABOUT SUSTAINABLE TRANSITION?
One of the biggest challenges of sustainable transition is financing Sustainable financing is an umbrella term for any financial activity (loans, investments, and others) that take into account environmental, social, and governance (ESG) factors. To deliver the objectives of UN SDGs and Climate actions under Paris Agreement, it is necessary that finance and financial services be provided to support, enable, and encourage companies, organisations, countries, and individuals to transition toward those objectives.
HOW SUSTAINABLE FINANCE EVOLVES?
How sustainable finance evolves? In 1992, at the Earth Summit in Rio de Janeiro a group of visionary leaders saw that transforming private finance would be key to achieving sustainable development.
Source: : https://www.unepfi.org/news/timeline/
THE FINANCE SECTOR PLAYS A VITAL ROLE IN SUSTAINABILITY
The finance sector plays a vital role in driving sustainabilit
Funding companies and activities with positive impact.
01
02
Developing new financial instruments
Supporting or calling government to take further action.
03
THE FINANCE SECTOR PLAYS A VITAL ROLE IN SUSTAINABILITY
The finance sector has a vital role to play Sustainable finance refers to the process of taking environmental, social and governance (ESG) considerations into account when making investment decisions in the financial sector, leading to more long-term investments in sustainable economic activities and projects.
Positive influence on companies and other actors
Providing capital
Supporting government efforts
THE FINANCE SECTOR PLAYS A VITAL ROLE IN SUSTAINABILITY
Mitigating climate risks as a key driver for sustainable business growth
There are two types of risks:
The material sustainability factors:
Examples: Those which can damage properties, and affect supply chains, and therefore disrupt production in the long term.
They may have a significant impact (negative or positive) on a company/organisation long term life or its business.
Examples of these risks include the possible implementation of a carbon tax, carbon disclosure mandates, or the transition to renewable energies.
Transition Risks
Physical Risks
Source: https://www.persefoni.com/learn/climate-risk-what-are-physical-transition-risks
THE FINANCE SECTOR PLAYS A VITAL ROLE IN SUSTAINABILITY
Sustainability criteria at the forefront of organizations decision-making There are several reasons companies/organisations consider sustainability criteria and risks in their decision making processes:
THE FINANCE SECTOR PLAYS A VITAL ROLE IN SUSTAINABILITY
Sustainability as value generation in the organizations ....
1.Top-line growth
info
info
2. Cost reductions
Value generation by adopting an ESG strategy in the organisation is seen on five main drivers
3. Regulatory and legal interventions
info
4. Productivity uplift
info
5. Investment and asset optimization
info
INTEGRATION OF ESG INTO FINANCIAL DECISIONS
Integration of ESG into financial decisions
Find more information in minicourse : Sustainability Fundaments
INTEGRATION OF ESG INTO FINANCIAL DECISIONS
The decisions are related to take action for example in climate change
Find more information in minicourse : Sustainability Fundaments
INTEGRATION OF ESG INTO FINANCIAL DECISIONS
The financial decisions are supported by financial organisations Financial organisations have compiling reasons and a key role to play:
EU FUNDING TOWARDS CARBON NET ZERO AND SUSTAINABILITY
EU is financing the sustainable transition
EU FUNDING TOWARDS CARBON NET ZERO AND SUSTAINABILITY
Taxation supporting the sustainable transition
Info
Source: Eurostat (https://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=env_ac_tax&lang=en)
EU FUNDING TOWARDS CARBON NET ZERO AND SUSTAINABILITY
The European Green Deal contribution
EU FUNDING TOWARDS CARBON NET ZERO AND SUSTAINABILITY
Funding to target resources related to the transition in Educational & Training (VET)
EU FUNDING TOWARDS CARBON NET ZERO AND SUSTAINABILITY
Financial resources are instrumental to achieve sustainable ambitions The Organization Strategy should be designed to ensure the long term financial of the organisation, including sustainability as a sub-strategy. Funding for sustainable initiatives may come from:
EU FUNDING TOWARDS CARBON NET ZERO AND SUSTAINABILITY
Funding to finance the green transition in VET For example in France, the national network of Centres of Vocational Excellence focused on the energy transition and eco-industry (Les centres d’excellence Campus des Métiers et des Qualifications de la filière «Transition énergétique, éco-industrie») combine national and regional funding as well as company resources to target resources on a key sector related to the green transition. Through investments in mainly technological and educational equipment and resources, they offer VET programmes to develop the skills and qualifications of young people while promoting the competitiveness of companies, thus boosting the creation of qualified jobs and strengthening the quality of VET qualifications.
EU FUNDING TOWARDS CARBON NET ZERO AND SUSTAINABILITY
Catalysing local actions through a national strategic approach to funding VET Several funding pools have been created to support local actors in greening VET. The aim is for the funds to act as a catalyst in the development of lasting practices that can serve as an inspiration to others. (See below some examples in Denmark)
Investment in equipment and associated skills development related to carbon reduction in the target sectors of agriculture and food, technology, construction and transport.
Another funding pool focuses on strengthening youth education’s work on green entrepreneurship. The pool is intended to provide students with a broader insight into and experience with green entrepreneurship Funding pool for the development and testing of teaching courses on vocational training about within the green transition and sustainability.
PROJECTS FEASIBILITY AND STUDY CASES
Five steps to apply for financing
step 4 Reporting
step 3 monitoring
step 2 selection
step 1 Definition
step 5 VERIFication
step 1
Impact report of the project to inform the investor.
Duis autem vel eum iriure dolor in hendrerit in
Framework Presenting the project and Feasibility.
Monitoring of funds raised for the project
Evaluation by ESG experts
This is the last step By external review
+info
+info
PROJECTS FEASIBILITY AND STUDY CASES
Projects feasibility Through feasibility study, projects can be determined if feasible/viable from the marketing and technical viewpoints. Given their estimated capital and operation costs (CAPEX & OPEX), projects can also be determined whether profitable or not. The Life Cycle Cost Analysis (LCC) is used to assess the economic feasibility of the product/service/ project. It allows you to answer some questions like:
PROJECTS FEASIBILITY AND STUDY CASES
Data Inventory to perform the LCC analysis
PROJECTS FEASIBILITY AND STUDY CASES
Costs involved to the analysis
Net present value (NPV) is used to calculate the current value of a future stream of payments from a project, or investment. NPV is used to determine whether or not an investment, project, or business will be profitable down the line
Capex: Capital Expenditure Opex : Operational Expenditure
PROJECTS FEASIBILITY AND STUDY CASES
Study Case 1 – Illumination at School A school would like to choose a light bulb for one of its offices. They want the bulb to work 10.000 h. You will evaluate two alternatives: A. To buy 100W incandescent bulb B. To buy 25W compact fluorescent bulb
Which one do you choose and why
PROJECTS FEASIBILITY AND STUDY CASES
Study Case 1 - Illumination at School costs This analysis shows clearly that each incandescent bulb replaced with a CFL would save 300 € over 10,000 hours of operation. Imagine the number of bulbs that you have at your school/organisation, now calculate how much would you save?
PROJECTS FEASIBILITY AND STUDY CASES
Embracing sustainability as a business model... Like any investment one organisation makes, the potential return on an investment (ROI) in sustainability should be considered before making the investment. The ROI Model for Sustainability typically defines and tracks results in 4 categories: Sustainable businesses can all increase their market share by using sustainability as a competitive advantage. In some cases, sustainability will allow you to bid on business and contracts
PROJECTS FEASIBILITY AND STUDY CASES
Study Case 2 –Reusing wastewater at University Campus Covenant University (CU) community in Nigeria, generates over 800,000 litres of wastewater per day. Effluent of the treated wastewater is discharged into a gully that drains into River Iju (River Atuwara). Schematic diagram below shows the approach followed to economically justify the wastewater recycling proposal as a complementary water source to the currently groundwater source.
source: urce: D.O. Omole1 et al,. 2019 Available online: https://iopscience.iop.org/article/10.1088/1742-6596/1299/1/012125
PROJECTS FEASIBILITY AND STUDY CASES
Study Case 2 – Cost of action The wastewater treatment system will involve the construction of the following:
- An artificial river (sub-projects )
- A car wash (sub-projects)
The treated water can be used for flushing, irrigation etc. However, subprojects have been proposed that would generate revenue for the University:source: urce: D.O. Omole1 et al,. 2019 Available online: https://iopscience.iop.org/article/10.1088/1742-6596/1299/1/012125
PROJECTS FEASIBILITY AND STUDY CASES
Study Case 2- Value of costs incurred over time as a result of the reuse scheme The Capital Expenditure (CAPEX), and Operating Expenditure (OPEX) for the proposed project were calculated.
The currency NGN was converted to Euros (05 of Sept. 2023) A discount rate (r) of 14% was used.
source: urce: D.O. Omole1 et al,. 2019 Available online: https://iopscience.iop.org/article/10.1088/1742-6596/1299/1/012125
PROJECTS FEASIBILITY AND STUDY CASES
Study Case 2 - Cost of no action The cost of no action can be interpreted as the benefits not achieved if the wastewater is disposed indiscriminately without reuse. The Energy saving potentials of reusing wastewater: Table above shows a comparison between total dependence on groundwater sources versus dependence on recycled water. When recycled water is used to complement the existing ground water source, the cost of energy per day is only about 49% of the cost of relying completely on ground water sources.
source: urce: D.O. Omole1 et al,. 2019 Available online: https://iopscience.iop.org/article/10.1088/1742-6596/1299/1/012125
PROJECTS FEASIBILITY AND STUDY CASES
Study Case 2 - Value of benefits derived from wastewater recycling
The currency NGN was converted to Euros (05 of Sept. 2023) A discount rate (r) of 14% was used.
source: urce: D.O. Omole1 et al,. 2019 Available online: https://iopscience.iop.org/article/10.1088/1742-6596/1299/1/012125
PROJECTS FEASIBILITY AND STUDY CASES
Study case 2 - Net present value is computed The value A, represents the net cash flow for a particular year and T is the number of periods or years in consideration.
source: urce: D.O. Omole1 et al,. 2019 Available online: https://iopscience.iop.org/article/10.1088/1742-6596/1299/1/012125
PROJECTS FEASIBILITY AND STUDY CASES
Study Case 2 – Feasibility Conclusion With a discount rate of 14 %, the projected cash flows are worth 760636 € which is greater than the initial 709678 € invested into the projects. The resulting NPV of the projects is 50958 €, positive value which indicates that pursuing the above projects may be optimal for CU University in Nigeria .
source: urce: D.O. Omole1 et al,. 2019 Available online: https://iopscience.iop.org/article/10.1088/1742-6596/1299/1/012125
4. CONCLUSIONS
5. Let's practice what we've learned!
QUIZ TIME
EVERGREEN QUIZ
Quiz
Financing a Sustainable Transition
EVERGREEN QUIZ
QUESTION 1/5
The sustainable finance takes into account?
Environmental, social, and governance (ESG) factors of an economic activity or project.
Economical KPIs
Biodiversity conservation
EVERGREEN QUIZ
RIGHT!
NEXT QUESTION
EVERGREEN QUIZ
QUESTION 2/5
Sustainability is a subject rising on the agenda of the financial services sector?
Only the Economical factors
No
Yes
EVERGREEN QUIZ
RIGHT!
NEXT QUESTION
EVERGREEN QUIZ
QUESTION 3/5
Feasibility studies also help project managers and stakeholders?
Determine the viability of the project
To prioritize cost and profitability over other goals
Reach environmantal goals
EVERGREEN QUIZ
RIGHT!
NEXT QUESTION
EVERGREEN QUIZ
QUESTION 4/5
Economic feasibility provides detailed information about:
Project spending and expected revenue
water and mineral costs
Environmental impacts and economical risks
EVERGREEN QUIZ
RIGHT!
NEXT QUESTION
EVERGREEN QUIZ
QUESTION 5/5
What kind of feasibility measures cost-effectiveness of a project or solution?
Green feasibility
Economic feasibility
Strategic feasibility
EVERGREEN QUIZ
RIGHT!
NEXT QUESTION
EVERGREEN QUIZ
1-2Correct
5Correct
3-4Correct
0Correct
Please read the minicourse.
Please read the minicourse.
Congratulations!
We advise you to read carefully the quiz
6. REFERENCES
Books/Papers/Articles
Further reading
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