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    Learning Curves: Project Cost Estimates

    Asian Development Bank | May 2007
    Abstract
    Cost underruns and overruns can be defined as the difference in the estimate of project costs upon which loan approval is based, and the final cost incurred at project completion. Of all Asian Development Bank (ADB) financed projects completed since 1995, 35% had a cost underrun higher than 20% of the estimated project cost, and 9% a cost overrun higher than 20%. Put together, almost half of the projects were characterized by inaccurate cost estimates. Cost underruns lead to loan cancellations and these impact both borrowing countries and ADBʹs operations. In the former, loan savings could have financed additional projects and, if ADB financing is from ordinary capital resources, unduly large loans incur unnecessary commitment fees. For ADB, cost underruns indicate inefficient allocation of scarce resources.
    Citation
    Asian Development Bank. 2007. Learning Curves: Project Cost Estimates. © Asian Development Bank. http://hdl.handle.net/11540/3364. License: CC BY 3.0 IGO.
    Keywords
    Cofinancing
    Development Financing
    Economic Development and Finance
    Finance
    Financial Advisory Services
    Financial Assistance
    Financial Support
    ADB
    Self Financing
    Aid Financing
    Financial Aid
    Development Banks
    Project Impact
    Development Banks
    Asset allocation
    Investment management
    Commercial documents
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    Citable URI
    http://hdl.handle.net/11540/3364
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    Author
    Asian Development Bank
    Theme
    Finance
     
    Copyright 2016-2021 Asian Development Bank Institute, except as explicitly marked otherwise
    Copyright 2016-2021 Asian Development Bank Institute, except as explicitly marked otherwise