Course Details

Training on Project Financial & Risk Appraisal

INTRODUCTION

Effective project management requires a thorough understanding of both financial performance and risk assessment. Project Financial & Risk Appraisal involves evaluating the financial viability of a project and assessing potential risks that could impact the project's success. This course is designed to provide participants with practical knowledge and analytical skills to conduct financial appraisals and risk assessments in a project environment.

Participants will learn to apply financial models, cost-benefit analysis, and risk management techniques to ensure that project investments generate the desired returns while minimizing potential risks. Through hands-on exercises and real-world case studies, this course will equip professionals with the tools to make informed financial decisions and implement strategies to manage project uncertainties.

DURATION

10 Days

TARGET AUDIENCE

This Macskills Development Institute training course will particularly benefit:

• Project and contracts personnel in both public and private sectors
• Project Management Professionals
• Technical specialists seeking broader perspectives of project planning & implementation
• Government officials, ministries, public sector agencies
• Financial decision makers, whose techniques of decision making and analysis will be improved through attendance
• Mangers involved in planning, risk assessments and decision making

OBJECTIVES

By the end of this training, participants will be able to:

1. Understand the principles of project financial appraisal – Learn how to evaluate the financial performance of projects using various financial metrics.
2. Conduct comprehensive cost-benefit analysis (CBA) – Apply CBA techniques to assess the financial viability of projects.
3. Evaluate financial indicators – Master the use of key financial indicators such as Net Present Value (NPV), Internal Rate of Return (IRR), and Payback Period.
4. Identify and assess project risks – Develop skills to identify financial and operational risks that could affect project outcomes.
5. Conduct risk appraisal and mitigation planning – Learn how to evaluate risk impacts and design mitigation strategies.
6. Integrate risk analysis into financial appraisal – Understand how to combine risk and financial appraisal for a more robust evaluation of project viability.
7. Utilize financial and risk management tools – Gain practical experience with financial modeling tools and risk management frameworks.

COURSE OUTLINE

Module 1: Introduction to Project Financial Appraisal

• What is Financial Appraisal?
  • Importance of financial appraisal in project management and decision-making
  • Overview of financial metrics used for project evaluation
• The Financial Appraisal Process
  • Steps in conducting a project financial appraisal
  • Distinguishing between financial and economic appraisals
• Key Financial Metrics
  • Net Present Value (NPV), Internal Rate of Return (IRR), and Payback Period
  • Profitability Index (PI) and Return on Investment (ROI)

Module 2: Cost-Benefit Analysis (CBA)

• Introduction to Cost-Benefit Analysis
  • Importance and application of CBA in project decision-making
  • Identifying and quantifying project costs and benefits
• Financial vs. Economic Cost-Benefit Analysis
  • Understanding the difference between financial returns and broader economic impacts
• Discounted Cash Flow (DCF) and Time Value of Money
  • Applying DCF techniques to project analysis
  • Understanding and calculating the time value of money
• Case Study: Applying CBA to a Real-World Project

Module 3: Financial Indicators and Investment Appraisal Techniques

• Net Present Value (NPV)
  • How to calculate and interpret NPV
  • Advantages and limitations of NPV in project appraisal
• Internal Rate of Return (IRR)
  • How to compute and use IRR for decision-making
  • Comparing IRR with NPV and other financial indicators
• Payback Period and Profitability Index (PI)
  • Calculating the payback period and understanding its limitations
  • Using PI as a complementary tool for investment decisions
• Case Study: Financial Appraisal of an Infrastructure Project

Module 4: Introduction to Project Risk Appraisal

• What is Risk Appraisal?
  • Importance of risk assessment in project evaluation
  • Categories of project risks: Financial, Operational, Technical, Environmental, and Market Risks
• Risk Identification Techniques
  • Identifying potential risks across project phases
  • Tools for risk identification: Risk checklists, brainstorming, SWOT analysis
• Risk Quantification and Qualitative Risk Assessment
  • Quantifying risk impact and probability
  • Using qualitative methods for assessing risk severity
• Case Study: Risk Appraisal of a Large-Scale Development Project

Module 5: Risk Analysis Techniques and Tools

• Risk Analysis Techniques
  • Sensitivity Analysis: Testing project performance under varying conditions
  • Scenario Planning and Monte Carlo Simulation
  • Stress Testing for Financial Risk
• Risk Mitigation Strategies
  • Designing risk response strategies: Avoid, Transfer, Mitigate, Accept
  • Developing a Risk Mitigation Plan
• Risk Monitoring and Control
  • Monitoring project risks during implementation
  • Use of Risk Registers and Risk Matrices for tracking
• Case Study: Risk Management Plan for a Complex Project

Module 6: Integrating Financial and Risk Appraisal

• The Interplay Between Financial and Risk Appraisal
  • Understanding how financial and risk assessments influence each other
  • How to incorporate risk analysis into financial appraisal models
• Risk-Adjusted Financial Metrics
  • Using risk-adjusted NPV and IRR
  • Calculating Expected Monetary Value (EMV)
• Decision-Making Under Uncertainty
  • Tools for making financial decisions in uncertain environments
  • Balancing risk and reward in project selection
• Case Study: Comprehensive Financial and Risk Appraisal of a Project

Module 7: Practical Applications and Case Studies

• Real-World Case Studies in Financial and Risk Appraisal
  • Discussion of success stories and lessons learned from project appraisals
  • Analysis of project failures due to poor financial and risk assessment
• Group Exercise: Conducting a Full Financial & Risk Appraisal
  • Participants will work in teams to appraise a project from start to finish, integrating financial and risk analysis.
• Group Presentations and Feedback Session
  • Presentation of appraisal results, discussion of findings, and peer feedback

CERTIFICATION

• Upon successful completion of this training, participants will be issued with Macskills Training and Development Institute Certificate

TRAINING VENUE

• Training will be held at Macskills Training Centre. We also tailor make the training upon request at different locations across the world.

AIRPORT PICK UP AND ACCOMMODATION

• Airport pick up and accommodation is arranged upon request

TERMS OF PAYMENT

• Payment should be made to Macskills Development Institute bank account before the start of the training and receipts sent to info@macskillsdevelopment.com