Cost-benefit Analysis and Economic Appraisal for project preparation in Pre-accession and Eastern neighbourhood Countries

About

Economic Appraisal (EA) is crucial for ensuring that public investment projects are both financially viable and aligned with broader socio-economic goals. This is particularly important for in Pre-accession and Eastern neighbourhood countries seeking EU funding and aiming to meet EU standards. The EU supports these countries, especially in the Western Balkans, Eastern Partnership regions, Ukraine, and Moldova, through various funding mechanisms such as the Instrument for Pre-Accession Assistance (IPA), the Neighbourhood, Development, and International Cooperation Instrument (NDICI), and Macro-Financial Assistance (MFA). These instruments foster development in key sectors like infrastructure, governance, and economic growth, while promoting alignment with EU policies and standards.

Cost-Benefit Analysis (CBA) and other forms of EA are essential tools for justifying projects and ensuring they deliver long-term benefits. They play a critical role at various stages of the project cycle:

• Project Preparation: CBAs/EAs help identify the best alternatives by comparing project options against set objectives and criteria, assessing projects’ financial sustainability and economic viability, and evaluating project risks and potential mitigants during procurement and implementation.
• Implementation: CBAs/EAs can help ensuring projects are on track to meet planned activities and objectives, serving as a reference point to monitor progress from financial and economic perspectives.
• Post-Project Evaluation: CBAs/EAs facilitate learning by identifying discrepancies between predicted and actual outcomes, informing the development of future projects and policies.

This iterative process enhances decision-making and strengthens transparency and accountability in project selection. For Pre-accession and Eastern neighbourhood countries, adopting rigorous EA methodologies is vital to align with EU standards, ensure efficient use of public funds, and contribute to sustainable development goals. Strong economic appraisals can improve their chances of securing EU funding, ensure projects’ quality and achieve positive, long-term outcomes.

CBA and EA methodologies have been used in the preparation and appraisal of EU-funded projects for several decades. In the 2021-27 cohesion context, the Common Provision Regulation requires managing authorities to ensure value for money in selecting operations to be financed. CBA and EA can be part of a broader methodology and criteria for selecting operations. EA is also relevant in other investment contexts beyond cohesion policy, including the Connecting Europe Facility (CEF) and the InvestEU Fund.

Target audience

More than 45 participants joined our webinar. It was mainly aimed at National, Regional and Local Authorities handling EU funds, implementing bodies, relevant line ministries and other relevant institutions involved in cost-benefit analysis and economic appraisal for project preparation beyond the European Union. 

Objectives

This webinar showcased our expertise in CBA and EA, and our experience on advisory support, acquired over nearly 20 years of supporting the preparation of EU-funded projects.

It covered the key principles of CBA/EA, providing participants with opportunities to engage in insightful discussions through Q&A sessions.

The webinar also assessed the participants' need for support in CBA and EA in the future, as well as training sessions to help them better manage and use EU funds.

Follow-up webinars will be planned in the course of 2025.