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Erudite AfricaCenter of Excellence
← Project Appraisal Level 3: Advanced Project Risk, Structuring and Monitoring

Risk analysis: sensitivity, switching values and scenarios

Module 01 / 5 · 60 min · Free preview

Find the few assumptions that decide a project's fate and measure how little they need to move before the project, or the loan, fails.

In this module you will learn to

  • Run one-at-a-time sensitivity tests and read their effect on NPV, IRR and minimum DSCR
  • Calculate a switching value and use it to rank critical assumptions
  • Build a plausible downside scenario and test whether the loan survives it
  • Prepare a risk matrix that names the mitigant and the risk bearer for each risk
  • Judge when probabilistic (Monte Carlo) analysis adds value

Built on

  • Erudite Africa training module: Project Appraisal Level 3: Advanced Project Risk, Structuring and Monitoring (October 2026)
  • A commercial bank's Revised Credit Procedure Manual (2025), unnamed
  • NBE directives as listed in the lessons: FXD/01/2024 as amended (including FXD/04/2026), SBB/87/2024, SBB/90/2024
  • Ethiopian laws: Environmental Impact Assessment Proclamation No. 299/2002, Environmental Pollution Control Proclamation No. 300/2002, Movable Property Security Right Proclamation No. 1147/2019, Insurance Business Proclamation No. 746/2012
  • Erudite Africa Ethiopian-context course catalogue (October 2026)

Examples and companies are fictional. Bank practices are shown as typical Ethiopian practice, not as any one bank's policy. Always apply your own institution's approved policy and the current NBE directives.