The full project cost will typically be determined after the completion of feasibility and

engineering designs in a traditional project delivery model. However, in a public-private

partnership (PPP) model, the cost may be determined in the pre-feasibility stage. The exact
determination of the cost will depend on the specific project and the approach used.

The essential criteria that should be present in a pre-feasibility stage of a Public-

Private Partnership (PPP) include:

1. Market demand and viability

2. Technical and operational feasibility
3. Financial viability and affordability
4. Legal and regulatory framework
5. Political and economic stability
6. Availability of resources (financial, technical, and human)
7. Environmental and social impacts and risks
8. Alignment with government policies and strategies
9. Identification of potential private sector partners
10. Assessment of the project's overall value for money.

Project IRR (Internal Rate of Return) in public-private partnership (PPP) projects tells us:

The profitability of the project: IRR is a measure of the profitability of a project, indicating the
expected rate of return on investment.

Feasibility of the project: IRR helps determine if the expected return is adequate to cover the costs
of the project and provide a reasonable return to the private sector partner.

Sustainability of the project: IRR is a long-term indicator of the sustainability of the project, helping
to ensure that the project is economically viable over the life of the contract.

Comparison with other projects: IRR can be used to compare the expected return of different PPP
projects and determine which project offers the best return for investment.

Sure, IRR as a long-term indicator of sustainability means that it helps to assess the ability of a PPP
project to generate sufficient revenue over its entire contract period to cover its costs and provide a
return on investment. A high IRR value indicates that the project is expected to generate sufficient
cash flows to cover its costs and provide a return, making it economically sustainable over the life of
the contract. On the other hand, a low IRR value suggests that the project may not be economically
sustainable and may not generate enough revenue to cover its costs, making it a less attractive
option for investment. Therefore, IRR helps ensure that the project is economically viable over the
entire contract period, making it a critical factor in determining the sustainability of a PPP project.

Affordability in public-private partnerships (PPP) refers to the balance between the cost to
the public sector of procuring a public service or asset through a PPP and the cost that
would be incurred through traditional procurement methods. The goal is to ensure that the
PPP provides value for money for the public sector and that the costs are affordable and
sustainable over the life of the PPP contract.

The affordability in a public-private partnership (PPP) project can be calculated as follows:

Project costs: Estimate all costs associated with the project, including design, construction,
operation, maintenance, and financing.

Revenue sources: Identify all revenue sources, such as user fees, government subsidies, and
private investment.

Affordability gap: Calculate the difference between project costs and revenue sources to
determine the affordability gap.

Subsidy calculation: Based on the affordability gap, calculate the amount of subsidy required from
the government or other sources.

Financial viability: Assess the financial viability of the project by analyzing the cash flows, expected
returns, and risk assessment.

It's important to keep in mind that the affordability calculation should be based on realistic
assumptions and should take into account the long-term sustainability of the project.

Financial viability is a crucial aspect of project management that assesses the ability
of a project to generate sufficient revenue to cover its expenses and produce a
positive return on investment (ROI). It involves analyzing the cash flows of the
project, expected returns, and risk assessment.

1. Cash flows analysis involves forecasting the inflow and outflow of funds over
the life of the project. This helps to determine the net cash position of the
project and if it will have enough funds to cover its expenses and repay loans,
if any.
2. Expected returns analysis assesses the potential financial benefits of the
project, including revenue and profit. The expected return on investment (ROI)
is calculated to determine if the project is financially viable and worth
pursuing.
3. Risk assessment evaluates potential risks and uncertainties that may impact
the financial viability of the project. This includes analyzing the potential for
cost overruns, delays, and changes in market conditions. The results of the risk
 assessment inform decisions about whether to proceed with the project and
how to manage the identified risks.

In summary, financial viability assessment is an important step in the project

planning process that helps to determine the financial feasibility of a project, and
provides critical information for decision-making.

Sure! The main sources of cash inflows in PPP (Public-Private Partnership) projects typically include:

User fees or charges for the services provided

Government payments or subsidies

Lease or rental payments from the public sector

Sale of assets or surplus energy

Interest and dividends from investments

And the main sources of cash outflows in PPP projects typically include:

Project construction and development costs

Operation and maintenance expenses

Repayment of debt and interest

Taxes and insurance

Replacement and upgrading of assets.

Funding refers to the act of providing resources, typically money, to a person or organization
to carry out a specific purpose, while financing refers to the process of obtaining the funds
needed to support a person or organization's long-term goals or investments. In simpler
terms, funding is the act of giving money, while financing is the process of getting the
money.