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Final investment decision (FID)

Its the point in the capital project planning process when the decision to make major financial commitments is taken

Final investment decision (FID)

Final Investment Decision is a stage during the life cycle of a project where a company decides to move forward or withhold the project.
The management decides on the future development of the project.

Large projects are mostly executed by a group of partners rather than a single owner because of the huge capital involvement, as it could be beyond the capacity of a sole owner.
The participation of multiple partners also divides the risk associated with the failure of the project.

Companies usually take several years to reach the FID stage.
It is the most crucial stage for developing a project that comes after a long-travelled road, starting from the Feasibility study phase to the pre–Front End Engineering and Design (FEED) phase and then the Front End Engineering and Design phase arrive at the FID stage finally.

The step marks a significant place before commencement of the engineering, procurement, and construction (EPC) stage.
During FID, the project owners begin actual execution and construction of the project.

Since large projects require huge capital investment, the owners plan strategically in advance to efficiently execute the project, minimising the risk involved in the project.
The owners also keep an eye on optimising the project cost so that the completion can bring profitable returns on the investment for the partners and shareholders.