CDM/JI Project Tools

COMFAR III: Computer Model for Feasibility Analysis and Reporting UNIDO’s methodology for project preparation and appraisal

The COMFAR III Software is a cash- flow oriented computer model to facilitate the financial and economic appraisal of investment projects. It is a comprehensive and flexible software, based on more than 20 years of experience. It has been expanded to cover industry, agro-industry, infrastructure, tourism and mining projects, as well as projects complying with the Kyoto Protocol (CDM/JI).

The software permits the analysis of industrial and non-industrial projects such as new investments, rehabilitations, expansions, joint venture or privatization projects.

With regard to CDM projects, the new software can be used to determine investment and operating costs and to define the sales programme for emissions reductions. It supports project pre-investment studies, facilitates data organization, computations and the production of pro-forma reports on financial and economic performance.
The COMFAR III CDM Module facilitates the demonstration of additionality for CDM projects as required under the financial analysis test of the Tool for the demonstration and assessment of additionality published by the United Nations Framework Convention on Climate Change UNFCCC CDM Executive Board (referred to as “additionality tool” from here-on) and the CDM guidelines published by UNIDO.

This tool requires the application of a step-wise approach to ascertain whether a project is eligible to generate certified emission credits (CER). It calls for:

  1. Identification of alternatives to the project activity that are consistent with current laws and regulations;
  2. Investment analysis to determine that the proposed project activity is not the most economically or financially attractive;
  3. Barriers analysis;
  4. Common practice analysis; and
  5. Impact of registration of the proposed project activity as a CDM project activity

The COMFAR III CDM Module addresses in particular the implementation of step 2. It helps to determine whether the proposed project activity is economically and financially less attractive than those alternatives without the revenue from the sale of certified emission reductions (CERs). It further provides an analysis of the impact of registration of the proposed project as a CDM project activity (step 5).

The COMFAR III CDM Module supports all analysis methods suggested by the additionality tool, namely:

  • simple cost analysis,
  • investment comparison analysis (investment ranking test), and/or
  • benchmark analysis

Hereby, the selection of the appropriate method is driven by the design of the proposed CDM project: if the proposed CDM project activity generates no financial or economic benefits other than CDM related income, then the simple cost analysis is to be applied. Otherwise the investment comparison analysis or benchmark analysis is to be applied.

COMFAR III presents the result in a transparent and formal manner. It provides all the relevant assumptions and is designed in a formal way so that the analysis can be replicated by third parties. It presents clearly the critical techno-economic parameters and assumptions (such as capital costs, fuel prices, lifetimes, and discount rate or cost of capital) and cites assumptions in a manner that can be validated by an assigned designated operational entity (DOE) under the CDM.

The COMFAR III Software is available in three versions:

COMFAR III Expert facilitates financial and economic appraisal of investment projects. It permits the user to simulate the short and long term financial and economic situation of industrial and non-industrial investment projects.

COMFAR III Business Planner enables the user to carry out financial analysis of investment projects. The economic appraisal module is not included in this project;


COMFAR III Mini Expert has been developed for preliminary assessment of investment opportunities from a purely financial point of view. (Does not include the CDM modules)

COMFAR III is a multilingual software and is currently available in 18 languages: Arabic, Chinese, Croatian, Czech, English, Farsi, French, German, Indonesian, Italian, Japanese, Korean, Polish, Portuguese, Russian, Serbian, Slovak and Spanish.

COMFAR III Demonstration versions can be downloaded free of charge from COMFAR’s

homepage at http://www.unido.org/comfar