20 Appraisal Report

The report must present the assumptions, discussions, and conclusions of the whole feasibility exercise presented in this chapter. Therefore, a typical table of contents for the appraisal report will include the following:

• Executive summary of the conclusions;
• Need and options analysis, policy objectives, and general considerations. This should describe the needs identified during the Identification Phase and indicate the appropriate policy directives to solve them;
• Governance considerations. This could include the description of the agencies involved and their responsibilities in the Appraisal Phase;
• The technical requirements. This could include the definition of the infrastructure, services, outputs location, target user group, technologies to be employed, and so on;
• The commercial feasibility analysis. This should present the main assumptions of the financial model and introduce the results of the commercial feasibility assessment;
• The market sounding conclusions. This should present the procedures chosen to contact the market and extensively present any feedback obtained and conclusions reached, including the decisions about eventual changes in the project;
• Economic analysis. This should be a summary of the CBA developed during the Identification Phase, highlighting the changes made with the revised data;
• Affordability. This should present the total estimated commitments in all scenarios and objectively introduce the results of the fiscal feasibility tests;
• Impact on gross debt. This should indicate the impact on the governmental balance sheet and demonstrate if this impact interferes in the debt limit thresholds;
• Environmental assessments and planned impact mitigations. This item should present the extensive results of the Environmental Impact Assessment and indicate if the project obtained the environmental approvals or, at least, what the required next steps to do so would be;
• Social Feasibility Analysis. This item should include the social impact assessment, including the social action plan;
• Legal due diligence. This should present all the legal issues identified and produce objective recommendations about eventual measures required to overcome legal obstacles;
• VfM assessment. This should indicate the level of accuracy obtained in the VfM estimations, and it should highlight the main drivers that add value to the project in quantitative and qualitative terms;
• The procurement strategy. This should indicate the route chosen and its main characteristics;
• Legal and regulatory requirements. This should list all the legal and regulatory requirements eventually in place for the Appraisal Phase and indicate, in the appraisal report, what information or analysis meets the appropriate requirements;
• Project plan and recommended next steps. This should present the revisited time schedule and the recommended aspects related to governance and operational roles in the next phase; and
• Conclusion. This should have a clear and objective recommendation for the decision-makers about the continuation or cancellation of the project.

The appraisal report should be an evidence-based document. It should reflect as accurately as possible all the work conducted during the Appraisal Phase. High levels of technical data are not necessary, nor is technical jargon, in the main body. Important technical data can be included as an appendix, such as costs, risk management, and technical information to support the feasibility of the project.

It is important that it is written in a style that provides a clear, objective, and direct recommendation for the decision-making authority, as it is the main tool for allowing the project to move on to the next phase of preparation.