EVALUATION OF THE ECONOMIC EFFICIENCY OF RESTORATION OF DRAINAGE SYSTEMS IN THE HUMID ZONE OF UKRAINE: MAKING INVESTMENT DECISIONS

Approaches to assessment of the economic effectiveness of restoring drainage systems in the humid zone of Ukraine are substantiated. A conceptual scheme has been developed that determines the stages of evaluation, sources of the input array of information, strategic orientation, and invariance of restoration projects, provides for considering a number of risks and limitations of a systemic and non-systemic nature when evaluating the project effectiveness of strategic alternatives. The basis of the evaluation is the results of the analysis of materials regarding the technical condition of drainage systems, the restoration of which in the drainage area is carried out according to two options: modernization of working (on an area of 1311,2 thousand ha) and restoration of non-working (on an area of 1962,9 thousand ha) drainage systems. In the calculations of restoration (modernization) costs, the results of a preliminary assessment of the cost of restoration work for various types of drainage systems (drainage, drainage-humidification, polder, and water circulation systems) were used based on the reduced costs for restoration of the intra-farm and inter-farm network, which were adopted in the "Strategy of Irrigation and Drainage ..." [27]. The economic indicators of the production of agricultural crops economically attractive to farming producers (grain corn, sunflower, rapeseed, soybean) were calculated under the conditions of their production before and after the implementation of the project of restoration (modernization) of drainage systems. The application of the traditional scheme for projected indicators calculating, at which the discount rate was defined as the weighted average cost of capital (WACC), is substantiated. Taking into account the specifics of drainage system restoration (modernization) projects and their duration, the weighted average rates for long-term loans and deposits (risk-free) for legal entities, taking into account the inflation component and the value of equity capital of agro-industrial complex enterprises, were chosen as the discount rate for the preliminary pre-investment analysis. Based on the calculation of the project effectiveness of the restoration (modernization) of drainage systems using the scenario approach according to the consolidated option for determining the payback of investment costs, it is proved that the options at the discount rates r1 (for 2021) and r2 (for the beginning of 2022), as well as the discount rate for the equity scheme, they give positive indicators of the investment project, which indicates the expediency of its implementation and economic efficiency. The internal rate of return for the three options shows a sufficient margin of safety (24–26%). The most economically expedient is the option with a source of financing from the equity capital of agro-industrial complex enterprises, for which the non-discounted (RR) and discounted (DPP) payback terms are 3,4 and 4,7 years, respectively.