Frigerio Economic Measures (1)

7/30/2019 Frigerio Economic Measures (1)

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Italian Committee of

United Cities (CICU)

PHARE - twinning Project SK02/IB/EN01

Slovak Hydrometeorological Institute

Dr. Piero Carlo Frigerio

FinPiemonte expert


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INVESTMENT

Application of financial resources for the purchase of

assets, equity holding, joint ventures, know-how,

patents and services liable to provide direct orindirect 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.


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PROPOSAL

A proposal is the set of specific investments

required to achieve a pre-established objective,clearly identificable both economically and

financially.


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PROJECT

A project includes definition of the means,

resources and time required to make theinvestment.

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.


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The profitability of an investment proposal is

assessed, calculating the following indices:

internal rate of returnpay-back period

net present value

break-even point


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SOURCES OF FINANCING :

Reportmust 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


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Evaluation parameters for calculation of the

amount of investments cannot be defined a prio r i .

These parameters could for example refer to the

following indicators:

Turnover Net profit

Employees Owners capital

etc.although there is no direct link between these

indicators and the capability to make an

investment.


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Every company shall be free to define the amountof investments, which it is willing to apply in the

future.

From the companys point of view the yearly

fixed investments must not compromise theprofit 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, environmentalinvestments, in relation to the economic asset of

the farm, have only negative effects, since

environmental benefits (hardly definable) are of

public interest, mostly.


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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.


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Fixed investments fo r the improvement of the

plant management

Benefits should address investments on

technology, in order that industry achieves assoon as possible the efficiency degree as to

compete in the global market.


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Fixed investments fo r the improvement of the

environmental qual ity

Regardless of the procedures of public supports,

we suppose that public benefit for investmentsshould be higher for environmental

investments than fortechnologyinvestments.


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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 introductionof technologies that enhance environmental

performance are encouraged.


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It is therefore possible that the investmentssustained 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 Cross-

Media Effects

DRAFT September 2003

European IPPC Bureau

(f inal version expected by December 2004)


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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 regardsthe 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.

Frigerio Economic Measures (1)

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