Sustainable Asset Valuation (SAVi) of the Contournement de Rabat (Morocco)

Key Messages

• The Rabat bypass in Morocco, including the iconic Mohammed VI Bridge, was built to decrease traffic and congestion in and around Rabat. SAVi assesses the financial implications of different operational risk scenarios.
• The SAVi assessment shows that the value of time saved and the costs of accidents are significant externalities related to the road project. For example, SAVi forecasts that a decrease in maintenance activities may lead to an increase up to EUR 236 million in costs of accidents.
• SAVi calculates the traditional financial indicators (NPV, IRR and debt coverage ratios) and concludes that the revenues of the project are insufficient to cover the capital and operational expenditures, under all risk scenarios.

IISD has carried out an economic and financial assessment of different risk scenarios of the contournement de Rabat, the bypass road in Morocco. The assessment also includes the valuation of different externalities related to the road project. IISD used the Sustainable Asset Valuation (SAVi) tool for this assessment.

SAVi is a simulation service that helps governments and investors value the many risks and externalities that affect the performance of infrastructure projects.

The distinctive features of SAVi are:

• Valuation: SAVi values, in financial terms, the material environmental, social and economic risks and externalities of infrastructure projects. These variables are ignored in traditional financial analyses.
• Simulation: SAVi combines the results of systems thinking and system dynamics simulation with project finance modelling. We engage with asset owners to identify the risks material to their infrastructure projects and then design appropriate simulation scenarios.
• Customization: SAVi is customized to individual infrastructure projects.