Analysis of Development Impacts

Infrastructural projects especially in countries with poor performing economies need to raise money through foreign investment in equity and cheap loans (Grants). Therefore foreign investments play a considerable role in the success of the projects especially from an economic point of view. Economic appraisal through conventional methodology stipulates that the sources of funds to finance these projects, either from domestic or foreign sources can be ignored. This study is going to evaluate the economic performance of a project from the prospective of the host country only. It is necessary to adjust the net economic benefits with the benefits and costs realized by foreigners. This analytical work through evaluating a project studies the different results created by project with foreign investments tied to subsidized loan, and also foreign investments which is not tied to subsidized loan. It shows there maybe projects with acceptable financial and economic features which create a net loss for the country.