Slovak Hydrometeorological Institute
Italian Committee of
United Cities (CICU)
PHARE - twinning Project SK02/IB/EN01
Dr. Piero Carlo Frigerio
FinPiemonte expert
Slovak Hydrometeorological Institute
Italian Committee of
United Cities (CICU)
PHARE - twinning Project SK02/IB/EN01
INVESTMENT
Application of financial resources for the purchase of
assets, equity holding, joint ventures, know-how,
patents and services liable to provide direct or
indirect economic benefits in subsequent periods.
Investment may therefore be made in fixed assets,
extraordinary expences, deferred charges, working
capital.
Investment activities take the form of „proposals“.
Slovak Hydrometeorological Institute
Italian Committee of
United Cities (CICU)
PHARE - twinning Project SK02/IB/EN01
PROPOSAL
A „proposal“ is the set of specific investments
required to achieve a pre-established objective,
clearly identificable both economically and
financially.
Slovak Hydrometeorological Institute
Italian Committee of
United Cities (CICU)
PHARE - twinning Project SK02/IB/EN01
PROJECT
A „project“ includes definition of the means,
resources and time required to make the
investment.
Each proposal may therefore comprise a
number of different projects in which part of
the proposal is implemented in conformity with
the pre-established timetable and objectives.
Slovak Hydrometeorological Institute
Italian Committee of
United Cities (CICU)
PHARE - twinning Project SK02/IB/EN01
The profitability of an investment proposal is
assessed, calculating the following indices:
internal rate of return
pay-back period
net present value
break-even point
Slovak Hydrometeorological Institute
Italian Committee of
United Cities (CICU)
PHARE - twinning Project SK02/IB/EN01
SOURCES OF FINANCING :
Report must provide an overview of possible sources
of financing to cover the planned investments,
indicating in particular:
own funds
recourse to short/medium/long terms loans
indicating the interest rate
possible facilitations, specifying the sums that can
be obtained, saved, financed and the relative rate
of interest in the case of loans
Slovak Hydrometeorological Institute
Italian Committee of
United Cities (CICU)
PHARE - twinning Project SK02/IB/EN01
Evaluation parameters for calculation of the
amount of investments cannot be defined a priori.
These parameters could for example refer to the
following indicators:
Turnover
Net profit
Employees
Owner’s capital
etc.
although there is no direct link between these
indicators and the capability to make an
investment.
Slovak Hydrometeorological Institute
Italian Committee of
United Cities (CICU)
PHARE - twinning Project SK02/IB/EN01
Every company shall be free to define the amount
of investments, which it is willing to apply in the
future.
From the company‘s point of view the yearly
fixed investments must not compromise the
profit too much. Any investment for “Fixed
activities” results in an immediate depletion of its
financial position, comparable to the amount of
the expense done. In particular, environmental
investments, in relation to the economic asset of
the farm, have only negative effects, since
environmental benefits (hardly definable) are of
public interest, mostly.
Slovak Hydrometeorological Institute
Italian Committee of
United Cities (CICU)
PHARE - twinning Project SK02/IB/EN01
We argue that the investments for environment
protection should not exceed on average 15-20 %
of the total year investments in order to be
sustainable.
State Authority should favour investments
dedicated to fixed assets, by providing industry
with various economic benefits.
Slovak Hydrometeorological Institute
Italian Committee of
United Cities (CICU)
PHARE - twinning Project SK02/IB/EN01
Fixed investments for the improvement of the
plant management
Benefits should address investments on
technology, in order that industry achieves as
soon as possible the efficiency degree as to
compete in the global market.
Slovak Hydrometeorological Institute
Italian Committee of
United Cities (CICU)
PHARE - twinning Project SK02/IB/EN01
Fixed investments for the improvement of the
environmental quality
Regardless of the procedures of public supports,
we suppose that public benefit for investments
should
be
higher
for
„environmental
investments“ than for “technology investments”.
Slovak Hydrometeorological Institute
Italian Committee of
United Cities (CICU)
PHARE - twinning Project SK02/IB/EN01
Industries are currently eligible for EU financing
of investments.
As a EU Member State Slovakia has become the
recipient of all the EU policies and programmes.
Among others, this means the possibility to apply
for a support from the Structural Funds in the
framework of the European Regional Policy.
In particular, measures aimed at the introduction
of technologies that enhance environmental
performance are encouraged.
Slovak Hydrometeorological Institute
Italian Committee of
United Cities (CICU)
PHARE - twinning Project SK02/IB/EN01
It is therefore possible that the investments
sustained by a company for the purpose of
protection of the environment will be
considerably reduced against the total necessary
amount.
Requirements and procedures are reported in
Reference Document on Economics and CrossMedia Effects
DRAFT September 2003
European IPPC Bureau
(final version expected by December 2004)
Slovak Hydrometeorological Institute
Italian Committee of
United Cities (CICU)
PHARE - twinning Project SK02/IB/EN01
To realize the actions suggested by BATs, three
main aspects, at least, are fundamental to be
carefully analysed:
capability to carry out big investments, as regards
the amount of money and the technical difficulties
capability to run new settlements (recent BATs
could require specific skills which are not available
in the company)
economic capability to support the investments and
to get cash.