Financial Evaluation of Industrial Projects under Uncertainty: Empirical Evidence from a Phosphate Investment by OCP in Morocco

Abstract

The main objective of this study is to assess the profitability of a strategic industrial project of the OCP Group, taking into account the financial risks and uncertainties associated with the global phosphate market over the period 2015-2025. To do this, we used recognized financial methods, including Net Present Value (NPV), Internal Rate of Return (IRR), Payback Period, and Profitability Index (PI), while also performing sensitivity analyses and prospective scenarios (optimistic, realistic, pessimistic). The financial data has been adjusted for confidentiality (×3) and comes from internal sources within the OCP Group as well as market data. The results indicate that, in the realistic scenario, the project has a positive NPV, an IRR higher than the cost of capital, and an acceptable payback period, confirming the financial viability of the project. The sensitivity analysis shows that variations in phosphate prices and energy costs have a significant impact on profitability, but remain within acceptable safety margins. This study provides recommendations for post-investment monitoring and proposes guidelines for strengthening the financial robustness of the project. Limitations include data adjustments, the exclusion of non- financial risks (environmental, social), and the uncertainty of market forecasts.