This handbook provides guidance on integration of risk analysis in the design and analysis of projects.
The Handbook provides guidance on integration of risk analysis in the design and analysis of projects. To illustrate the ease of use of quantitative risk analysis software, the Handbook includes case studies based on actual ADB projects in the agriculture, education, health, and power sectors. It also provides direction on how the analysis of risk can be used to improve the focus on poverty reduction.
The purpose of this Handbook is to support the development of a practical and operationally relevant methodological framework for the analysis of risk in project design and project economic analysis.
The Handbook is divided into five parts. Following a brief introduction, including a summary of the reasons why risk analysis may be undertaken, Part II outlines the available technical approaches to modeling risk within conventional project economic analysis. The classic distinction between “risk” and “uncertainty” is explained, and then some typical techniques for dealing with uncertainty are outlined. Part III reviews the practical experience of ADB and other major agencies with regard to the analysis of risk in project design. Part IV considers the implications for risk analysis of ADB’s increasing emphasis on distribution and poverty impact analysis. Finally, Part V provides practical guidance on how to apply different types of risk analysis in different situations, based on existing techniques and given the emerging nature of ADB’s operations.