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Centre for Financial and Management Studies (CeFiMS)

Project Appraisal and Impact Analysis

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This course has been designed around the core areas of project planning, investment appraisal, social cost-benefit analysis, project risk, distributional effects and impact assessment.

Please note that whilst this course covers both private and public sector investment and appraisal techniques, its emphasis is on development projects which are wholly or partially funded from the public sector.

The techniques of project financial and economic analysis and impact assessment are becoming increasingly important as methods for choosing between projects where resources, both financial and human, are limited. The use of recognised assessment techniques for project proposals has become mandatory as part of the selection and justification process for projects funded by the international financial institutions such as the World Bank, the International Finance Corporation, the African, Asian and Inter-American Development Banks as well as regional banks and other donor agencies. However, while financial and economic issues relating to resource allocation for projects, development programmes and policies are all important, policy makers and development banks and institutions are increasingly concerned with other issues – including the environmental, social, gender, health, poverty and welfare impacts of projects.


Study Guide

You will receive a looseleaf binder containing eight ‘course units’. The units are carefully structured to provide the main teaching, defining and exploring the main concepts and issues, locating these within current debate and introducing and linking the further assigned readings. The unit files are also available to download from the Online Study Centre.


Boardman A, Greenberg D, Vining A, Weimer D, (2006) Cost-Benefit Analysis – Concepts and Practice, (Used for Units 1 - 6.)

Glasson, J., Therivel, R. and Chadwick, A. (2005) Introduction to Environmental Impact Assessment, Third Edition, Routledge, London & New York. (Used for Units 7 and 8).


You will receive two volumes of Readings, which are a compilation of recently published articles or seminal writings which augment and illustrate the main text.

Online Study Centre

You will have access to the OSC, which is a web-accessed learning environment. Via the OSC, you can communicate with your assigned academic tutor, administrators and other students on the course using discussion forums. The OSC also provides access to the course Study Guide and assignments, as well as a selection of electronic journals available on the University of London Online Library.

Objectives and learning outcomes of the course

The purpose of this course is to give a theoretical and applied background to investment finance, the project cycle from project identification to project and programme appraisal techniques, including financial and economic analysis, impact assessment and risk analysis. It should enable you to deal with such issues as the following:

  • How should a private company choose whether to invest in a high-technology computer chip factory in Singapore or to locate the factory in Shanghai, China?
  • A new airport is proposed for development in Southern England: given that three sites are potentially available, which site should be chosen on economic, environmental and social grounds?
  • Should development finance be targeted on large medical facilities or decentralised clinics with a policy based on preventative medicine?
  • Should the Government of Tanzania support investment in a large fertiliser plant with foreign capital or support the use of local small-scale fertiliser production?
  • Are EU fishing agreements in the best economic and financial interests of countries such as Senegal, Mauritania and Mozambique, which have signed such agreements?
  • Should the state invest heavily in education provision at primary school level or allow entry to private sector school operators?

Scope and syllabus

Course Units
Unit 1: Project Appraisal & Evaluation: An Introduction
  • 1.1 Project Appraisal and Evaluation – an Overview
  • 1.2 What is a Project?
  • 1.3 The Project Cycle
  • 1.4 Project Planning Techniques
  • 1.5 Project Quality Factors and Basic Needs
  • 1.6 The Measurement of Project Performance
  • 1.7 Summary and Conclusions
Unit 2: Investment Appraisal Techniques
  • 2.1 Introduction
  • 2.2 Cash Flow Analysis
  • 2.3 Private Sector Appraisal Techniques
  • 2.4 An Introduction to Spreadsheet Modelling
  • 2.5 Mutually Exclusive Projects & Other Issues
  • 2.6 Summary and Conclusions
Unit 3: Social Cost-Benefit Analysis
  • 3.1 Introduction
  • 3.2 Basic Steps in Social Cost-Benefit Analysis
  • 3.3 Theoretical Basis of Social Cost-Benefit Analysis
  • 3.4 The Social Discount Rate
  • 3.5 Case Study
  • 3.6 Summary and Conclusions
Unit 4: Valuation Techniques, Applications in Various Sectors and Case Studies
  • 4.1 Introduction
  • 4.2 Revealed Preference {Indirect] Methods
  • 4.3 Contingent Valuation Methods
  • 4.4 Cost Effectiveness Analysis
  • 4.5 Sector Analysis and Case Studies
  • 4.6 Limitations of Social Cost Benefit Analysis
  • 4.7 Summary and Review
Unit 5: Risk & Uncertainty Analysis in Project Appraisal
  • 5.1 Introduction
  • 5.2 Risk and Uncertainty
  • 5.3 Techniques for Risk Analysis
  • 5.4 Uncertainty
  • 5.5 Risk and Large Projects
  • 5.6 Spreadsheet Modelling and Risk Analysis
  • 5.7 Summary and Conclusions
Unit 6: Distributional Issues & Social Cost-Benefit Analysis
  • 6.1 Introduction
  • 6.2 Measurement of Income Distribution
  • 6.3 Theoretical Basis for Welfare or Distributional Weighting
  • 6.4 Regional Weights
  • 6.5 Multi-Criteria Analysis
  • 6.6 Summary and Conclusions
Unit 7: Environmental and Social Impact Assessment (ESIA)
  • 7.1 Introduction
  • 7.2 Laying the Foundation
  • 7.3 Impact Assessment, Reporting and Decision-Making
  • 7.4 Summary and Conclusions
Unit 8: Impact Assessment: Additional Tools and Techniques
  • 8.1 Introduction
  • 8.2 ESIA Tools
  • 8.3 Improving the Effectiveness of ESIA
  • 8.4 Thematically Focussed Forms of Impact Assessment
  • 8.5 ‘Specialised’ Assessment Techniques
  • 8.6 Widening the Scope of Impact Assessment
  • 8.7 Emerging forms of Assessment
  • 8.8 Summary and Conclusions

Method of assessment

You will complete two assignments, which will be marked by your tutor. Each assignment is worth 15% of your total course mark. You will be expected to submit your first assignment by the Tuesday of Week 5, and the second assignment at the end of the course, on the Tuesday after Week 8. Assignments are submitted and feedback given online. You will also sit a three-hour examination on a specified date in October, worth 70% of your total mark. An up-to-date timetable of examinations is published in April each year.