Combining multicriteria decision analysis and cost-benefit analysis in the assessment of maritime projects financed by the European Investment Bank

As the financing institution of the EU the European Investment Bank (EIB) has a long history of investment in the maritime sector. The EIB’s support for the sector is guided by EU maritime policy which is increasingly influenced by non-financial criteria such as safety, environment and employment. The increasing inclusion of non-financial criteria into financial decisions adds to the degree of subjectivity involved in project investments, especially ones involving public funds. This subjectivity is present in individual decision maker’s thought processes when assessing the relative importance of each criterion. Within this context, this paper examines a methodology which combines established financial analysis methods with multi criteria decision analysis (MCDA) in order to try to address this complex issue. The aim is to develop a model, which incorporates financial and non-financial criteria whilst accounting for the inherent subjectivity in investment decision making, in a transparent and auditable manner. The paper examines the application of the model to a fleet expansion project which has been financed by the EIB. Further research is proposed including how the model may also be utilised as a performance indictor to track the degree to which EIB financing meets the goals outlined in EU maritime policy