Definition:
The point in the project lifecycle where a company decides to proceed with the investment, committing necessary resources based on the completed Front-End Loading phases.
Key Components:
- Comprehensive Business Case: Detailed analysis justifying the investment
- Risk Assessment: Evaluation of potential project risks
- Financial Commitment: Allocation of capital and resources
Use Cases/Industries:
- Renewable Energy Projects: Deciding on the construction of a new wind farm
- Infrastructure Development: Approving funds for a new transportation system
Advantages:
- Clear Commitment: Signals readiness to proceed
- Resource Allocation: Ensures necessary assets are in place
Challenges:
- High Stakes: Significant financial implications
- Market Uncertainty: External factors can impact the decision
Related Terms:
Project Sanction, Investment Decision
Example:
After completing the FEL phases, an energy company reaches the FID to build a new offshore oil platform, committing the required capital and resources.
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Synonyms:
Go/No-Go Decision, Investment Approval
