SAVi identifies a range of economic, social and environmental risks and simulates how these will change and affect project cashflows across the asset life cycle. This is possible because the SAVi system dynamics model simulates how the asset affects and is in turn affected by the surrounding economic, social and environmental “system.” SAVi can hence value in financial terms a complex and dynamic range of risks, as well as indirect costs, intangible costs and opportunity costs.
As SAVi simulates the systemic impacts of infrastructure projects, it also identifies and places a dollar value on externalities. Policy-makers and investors can use SAVi to determine the wider second-order gains and trade-offs and prioritize projects based on their whole-life value for sustainable development. SAVi can help identify and evaluate tomorrow’s project risks based on today’s externalities.
SAVi also adds value by accounting for the cost of capital and other financial concerns, such as currency depreciation, interest rates, inflation, varying cash flows and the present value of money. The SAVi financial model calculates net present value, internal rate of return, credit ratios, gross margin and other financial performance indicators.