Mission and vision USAIDs mandate is to end poverty, build democratic governance, rule of law, and inclusive institutions. UNPD advocate for change, and connect countries to knowledge, experience and resources to help people build a better life. There are three proposed nature-based solution projects which is to be appraised against the strategic objectives of the USAID and the USAID will commission only 1 (one) of these projects in Thailand. The USAID has three must have strategic objectives as listed below. These objectives are determined by the executives and in line with shareholder expectations of ethical, responsible and beneficial outcomes and comply with the organisations strategic mission. 1. The selected project must need to meet legal, safety and environmental standard. 2. The selection projects must have the ability to deliver sustainable livelihoods and deliver conflict sensitive outputs i.e. the output of the project must not propagate conflicts within the stakeholder communities. 3. The selected project should not have an adverse effect on a current or planned operation within the larger community. The third objective is in reference to the USAIDs strategic plan to deliver a similar project in other south Asian countries, hence the need to maintain a neutral political position and engage with stakeholders. Want strategic objectives are assigned relative importance by top management of USAID. Mapping of all project will adhere to the already established weighting for their relative importance. Want objective are not critical to the USAIDs mission and are as follow: 1. The project product will have the potential to be nominated for the SDG project of the year based on its clear link to the above SGDs 2. Attract and create a strong media attention. 3. Generate additional benefits to communities through enhanced payment for eco services 4. Raise public consciousness about environmental issues. 5. General a payback benefits within 2 years of operations. The project must not exceed the budget of 75million. It must have a positive NPV given a discount rate of 8% 6. Advance the state of the art nature-based solutions for international development 7. Provide the basis for the developments of a new and scalable solutions Overview of the project Proposals Project Proposal 1: Zajut Forest Reserve This is a replanting/reforestation project in Zajut Forest Reserve a degraded forest due to unsustainable logging practices and 2 sets of droughts induced fires in the past. Zajut was discovered to house a high density of orangutan population. In attempt to save these orangutans from extinction, the replanting project aims to ensure long-term forest management and care to ensure that each tree planted grows successfully against threat of weeds, grass, creepers and climbers. The initial site clearance of the project site will, however utilise technologies that is high in energy consumption. Furthermore, the Zajut site remains a place of high conflict tension and initial assessment of the project reveals a high possibility of conflict within the communities due to the proposed solutions. The project is expected to deliver the below investment costs and benefits, delivered within 75M budget. Year CY1 CY2 Y1 Y2 Y3 Y4 Y5 Y5 Y7 Y8 Y9 Y10 Y11 Investment Costs 25 50 -30 Benefits 35 35 50 50 50 50 50 50 50 50 50 This document is for Bradford University students for their own use in completing their assessed work for this module and should not be passed to third parties or posted on any website. Any infringements of this rule should be reported to Bradford University Registry Assignment Brief Page 3 of 6 Project Proposal 2: Natural Wastewater Treatment- Babam The project consists of a replicable, low-cost and high-efficiency solution suitable for small settlements, to address localized pollution related pressures and minimize subsequent effects to the biodiversity and human health in rural areas of the Babam. The project will support the supply of fresh water for domestic use. The use of Constructed Wetlands will be utilised being a nature-based solution that presents a number of advantages. It has low construction, operation and maintenance costs, it is efficient and is easy to operate. As such, it is likely that other rural settlements in the area might be interested in applying it. Stakeholders were consulted and updated on the proposed constructions technical details throughout the process, in order to ensure a high level of ownership by those who would be directly affected by this project. The infrastructure consists of: A screening chamber where pre-treatment of wastewater takes place. A septic tank called Anaerobic Baffled Reactor (ABR) whereby nutrients and BOD5 are reduced up to 90% It is expected that the project will align with the UN SGDs by alleviating poverty, engendering peaceful cohabitation with the communities, enhancing the health of the community and promoting nature-based solutions to water treatment. The projects expected investment costs and benefits are shown below with 75M budget. Year CY1 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10 Y11 Y12 Investment Costs 75 -25 Benefits 37.5 37.5 50 50 50 50 50 50 50 50 50 50 Project Proposal 3: Dig irrigation system- Samboz Dig irrigation will use a method of dripping that has been associated to fracking to extract water from the earth aqueducts. The project will deliver a green energy efficient solar powered dam with smart radar sensors to perceive the environmental condition and initiate the irrigation process autonomously. The pre-feasibility investigation of the site suggest that the project construction will utilise a lot of energy and affect the ground stability of the sounding area. This method has the potential of affecting the stability of buildings and other infrastructures close to the site. The irrigation systems will also be equipped with smart connectivity features and is very compatible to the existing farm equipment, hence delivering conflict sensitive outcomes. The projects expected achieve the below investment costs and benefits with 200M budget. Year CY1 Y1 Y2 Y3 Y4 Y5 Y5 Y7 Y8 Y9 Y10 Y11 Y12 Investment Costs 100 -20 Benefits 2.5 2.5 5 10 10 10 10 10 15 15 15 10 Your task Part One 1a- Project Selection As a member of the strategic project selection team you are to evaluate each of the submitted proposals. The task is to present a business case beginning with ranking each proposed project according to the strategic objectives of USAID, and to select a project to be commissioned using the project selection tool in below. You MUST show your calculations and utilise analytical tools (such as Excel) to conduct your analysis. You can then present the output of your analysis in your business case under this section. Your analysis must consider the Payback Period and NPV of the projects and the qualitative must and want objectives of USAID. You MUST also engage with literature to demonstrate that you understand the analytical tools used (30%). DO NOT USE appendix for any element of this work Must Objectives Must meet if applicable Project proposals meet legal, safety and environmental standard Yes= Y No= N Not applicable= N/A 1 2 3 deliver sustainable livelihoods and conflict sensitive outputs i.e. the output of the project must not Yes= Y No= N Not applicable= N/A This document is for Bradford University students for their own use in completing their assessed work for this module and should not be passed to third parties or posted on any website. Any infringements of this rule should be reported to Bradford University Registry Assignment Brief Page 4 of 6 propagate conflicts within the stakeholder communities not have an adverse effect on a current or planned operation within the larger community. Yes= Y No= N Not applicable= N/A Want Objective Relative importance 1-100 Single project impact WS* WS* WS* have the potential to be nominated for the SDP project of the year based on its clear link to the above SGDs. 60 0=No Potential 1= Low potential 2=High potential Attract and create a strong positive media attention 10 0=No Potential 1= Low potential 2=High potential Generate additional benefits to farmers through enhanced functionality and compatibility with existing farming plants and equipment. 20 0=No Potential 1= Low potential 2=High potential Raise public consciousness about environmental issues. 55 0=No Potential 1= Low potential 2=High potential Generate a payback (PB) benefits within 2 years of operations. It must not exceed the budget of 75million. It must have a positive NPV given a discount rate of 8% 70 0= PB 2yrs, - NPV 1= PB< 2 yrs, - NPV 2= PB2 yrs, +NPV Advance the state of the art naturebased solutions for international development 40 0=No Potential 1=Low potential 2=High potential Provide the basis for the developments of a new and scalable solutions 10 0=No Potential 1= Low potential 2=High potential Total Weighted score Priority Part 1b- Project Justification (15%) Using credible and appropriate project management literature, (i) critically justify your selected project showing how this aligns with the strategic organizational objectives of USAID, Part 2- Project Finance and Strategy Analysis Following your project selection, you have been task with developing proposals to senior management of USAID on the following: Economic and Financial analysis: An annual Statement of Costs and Benefits, and Trading and Profit and Loss Account For your economic analysis of your selected project, you must consider the following financial information for the investment project: Investment Costs - The total project investment cost is 73.5M. This is made up of Land & Buildings 60M, Construction labour 7.5M, Machinery & Equipment 2M, Vehicles 2M, and Furniture and Fittings 2M. You should assume that land clearance, construction, installation of machinery and commissioning of the project takes 12 months. The machinery and equipment have This document is for Bradford University students for their own use in completing their assessed work for this module and should not be passed to third parties or posted on any website. Any infringements of this rule should be reported to Bradford University Registry Assignment Brief Page 5 of 6 a useful life of 6years with a replacement cost of 2M. The vehicles have useful life of 4 years and a replacement cost of 2M. You should calculate depreciation of the other assets using appropriate rates and methods of your choice. The residual value for the building is given in the tables of the project proposals under the investment Costs. You must clearly explain the methodology employed drawing on credible literature and justify any assumptions that you make. In addition to the costs and benefits on the project proposal tables, the following cost and benefits will further be acquired throughout the lifecycle of the project. Production It is estimated that the selected project will produce 300,000 units in the first year of production and will grow at 12% per year for the two subsequent years. Following this there will be no subsequent growth in production. Sales The sales price is 20 per unit. Operating Costs - the project will operate and produce irrigation outputs per the years on the costs and benefit table provided for each project. Direct labour costs are approximately 30% of the unit selling price and direct materials are 20% of the unit selling price. Fixed Costs - are 3,000 for all operating years. Physical Working Capital Costs - should be based on the following assumptions: o Materials 1.5 months supply kept in stock o Final goods - 1 months stock kept on average Working Capital - should be estimated on the following assumptions: o Accounts receivable - 2.5 months credit allowed before payment due o Accounts payable - 1 months credit given on materials purchased Using this information, you should answer the following questions to determine whether or not this project acceptable: (a) Prepare an annual statement of costs and benefits (pre-financing). This must show the step-by-step approach learned in class. Interpret the results and support the use of analytical methods with reference to the relevant theoretical literature (15%). (c) Calculate the Trading Profit and Loss Account (Income Statement) and the Statement of Financial Planning for the project. Profits are taxable at 15% of annual profit and no tax holiday is available, but earlier losses can be offset against subsequent annual profits where applicable. Using appropriate ratios determine whether the level of profit is acceptable? Interpret the results with reference to the relevant theoretical literature (20%). (d) Critically explain why USAID should not rely on NPV for decision making (10%)