Low Carbon Urban Infrastructure Investment in Asian Cities

26 T. WAKIYAMA ET AL.

Table 2.4 Monte Carlo simulation results: IRR and NPV forecast values

IRR NPV

Immediate

amortization

Normal

amortization

Immediate

amortization

Normal amortization

Base case 4.1 % 5.4 % 2,027,561 1,596,096
Mean 4.3 % 6.0 % 2,424,052 1,908,257
Median 4.3 % 5.8 % 2,385,502 1,889,248
Mode – – – –
Standard
deviation

1.0 % 2.8 % 1,950,528 1,772,726

Variance 0.0 % 0.1 % 3,804,557,599,868 3,142,556,063,614
Skewness 0.0755 0.4924 0.0832 0.1995
Kurtosis 2.87 3.42 2.84 3.00
Coeff. of
variability

0.2407 0.4757 0.8047 0.9290

Minimum 0.9 % –0.3 % –3,982,245 –2,856,827
Maximum 7.6 % 19.3 % 8,899,546 8,443,521
Range width 6.7 % 19.7 % 12,881,791 11,300,349
Mean std.
error

0.00 % 0.1 % 61,681 56,059

Source: Author

0.05

0.04

0.03

0.02

0.01

0.00

NPV

Probability

(6,000,000) (4,000,000) (2,000,000)02,000,000

52

48

44

40

36

32

28

24

20

16

12

8

4

0

Frequency

Certainty Min = (11,286)

Certainty = 22.38%

Fig. 2.4 NPV distribution for 20-year immediate amortization for an FIT of 40
JPY/kWh. Source: Author