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Identifying Project Financing Priorities

Situation

  • Our bank client had to grant financing to enterprises that would turn a profit and also efficiently develop its country’s economy. As different industries use resources from other sectors in different amounts and quantities, the multiplied effect on the economy in total can be varied
  • The banks priorities and financing must take into account the above
  • One of the criteria for identifying priority investment projects was the effect of multiplication

Goal

  • To develop a methodology to assess the multiplication effect on different sectors
  • In detail, to describe the effect of multiplication for an agreed list of industries
  • Value the potential of the multiplication effect for the bank’s analyzed projects

Our approach

  • Analyzed multiplication effect accounting methodologies used in Western countries
  • Calculated the multiplication effect on Russian industries taking into account the future structure of Russia’s economy
  • For the bank’s priority sectors, detailed descriptions of that sector’s influence on the economy in whole were provided
  • Conducted an assessment on the potential of the multiplication effect’s influence on the economy from successful achievement of the project, financed by the bank according to its identified priorities

Results

  • A methodology for accounting the multiplication effect was developed
  • The multiplication effect by the key sectors in the Russian economy was assessed
  • The potential from the multiplication effects of rolling out the projects planned by the bank in accordance with the bank’s project realization priorities was calculated

 

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