Definition & Objectives of T E V
Techno Economic Viability Study & Feasibility reports provides appraisal of technological parameters of a project and its impact on the financial viability of project. TEV study is a risk mitigation task undertaken in respect of any industrial activity prior to decision taken by bank, whether it should lend for such project or not.
It is obvious that no project can be absolutely risk less, the analysis of the degree of technical risk and associated financial viability, by performing Techno-Economic Viability Study (TEVS) is to assist bank & regulatory bodies to take a view on the acceptability of risk level.
The purpose of TEV Study is to provide utility to the sanctioning authority to conclude at an informed judgment as regards acceptance of the project for lending (or investment) purpose.
Benefits of T E V
• Is a checklist to confirm that all the functional aspects of the manufacturing activity / business is studied prior to implementation, to ensure that the proposed business is a success
• Guideline report which helps the management for managing project implementation and COP
• Helps to convince the bankers, partners, government and others to avail SUPPORT
• Risk Mitigation- unit becoming sick
• Market Analysis
• Technology/Process
• Operations/Production
• Financin
It Covers aspects of the business ultimately to ensure profitability of the proposed business
i) Management capability to manage the business
ii) Government clearance / approval feasibility
iii) Marketability of the product to the extent of production proposed
iv) Technical feasibility of implementation and operations
v) Risks and Mitigants- TOWS ,Sensitivity & Scenario Analysis
vi) Financial viability to ensure sufficient project cash flows to meet NPV,MIRR,DSCR
Essentials of report
i)Promoters & their background – only objective assessment of Promoters and their background based on their experience, existing operations and professional qualifications etc. to be given. Relevance of these to the proposed venture in case of new units to be brought out.
ii) Project cost & Means of finance.
iii) Financial analysis in case of existing units
iv)Plant and Machinery - comments on condition, balancing/ adequacy of existing/proposed machinery, technological level, suppliers of machinery etc should be given. In case of second hand machinery, availability of chartered engineer’s certificate on age of machinery, condition of machinery, reasonability of cost, residual life and availability of spares etc should also be seen and commented upon.
v) Infrastructure - availability of the required infrastructure, arrangements made/proposed and adequacy thereof vi) Raw materials - required raw materials, quantitative requirements based on yield data, sources of supply, cost of raw materials and their availability position etc
vii) Products - main product(s) to be manufactured, bye-products and wastes etc. Quantitative projections (where available/ possible) proposed selling price vis-à-vis current market prices etc
viii) Market & Marketing Arrangements - Demand supply data/ position. Other competitors in the industry, imported substitutes, targeted consumer segment.
ix) Assessment of Working Capital requirements.
x) Assessment of Term Loan requirement.
xi) SWOT analysis including risk factors and risk mitigants.
xii) Concluding comments on technical feasibility and economic viability including BEP analysis, DSCR calculations, IRR calculations and sensitivity analysis on sales and major inputs. Debt servicing capacity of the project at different DSCR levels may be worked out where the project DSCR is lower than the benchmark figure for the limits sought by the applicant/ borrower
कोई टिप्पणी नहीं:
एक टिप्पणी भेजें