Division 2.2 Financial analysis

As set out in Article 101(1)(e) of Regulation (EU) No 1303/2013, a financial analysis must be included in the CBA.

The financial analysis shall include:

1. (a)

   assessment of the financial profitability of the investment and of national capital;

2. (b)

   determining the appropriate (maximum) contribution from the Funds;

3. (c)

   checking the financial viability (sustainability) of the project.

Financial analysis should, where possible and appropriate, be carried out from the point of view of the project owner and/or operator allowing to verify cash flows and guarantee positive cash balance in order to verify the financial sustainability and to calculate the indices of financial return on the investment project and on capital based on the discounted cash flows.

If the owner and the operator are not the same entity, a consolidated financial analysis, which excludes cash flows between the owner and the operator, should be undertaken.

Where possible and appropriate, the financial analysis should be carried out in constant prices (prices fixed at a base-year), but expected changes in relative prices should be considered as part of the risk assessment.