tev-study-lie-report – Financial Mindss

TEV Study & LIE Report

Techno Economic Viability (TEV) study of a project encompasses the evaluation of a project for evaluating the technical and financial information about the project, with relevant data about its technological feasibility and economic viability, into one or a few criteria on the basis of which the project is recommended for Selection, Modification or Rejection.

Techno-Economic Viability (TEV) Study evaluation is to assist lenders to take a view on the acceptability of the degree of risk involved in a project.

It takes into account an analysis of technological risk, market risk, regulatory risk, financial risk, etc. A critical evaluation of these parameters is essential for a meaningful TEV study.

Technical feasibility

Availability of skilled manpower
Assessment of existing capacity
Assessment of the available land in use for the project
Assessment of suitability and availability of infrastructure available for the activity of the company

Market potential

Competition in the field
The demand supply analysis
Present and future market scenario
Assessment of marketing infrastructure available

Financial Viability

Conduct sensitivity analysis of the project
Assessment of future cash flows and profitability of the project
Financial viability of the unit based on the financial projections, profitability (income and costs), cash flow, IRR, DSCR, DP, MPBF etc.

Management Capabilities

Assessment of management capabilities

SWOT Analysis

SWOT analysis has been carried out to identify the key internal and external factors which are important for success of the project.

Lender’s Independent Engineer’s (LIE) Report refers to the technical due diligence report prepared by an Independent Engineer, also known as the Lender’s Engineer and typically selected by the lender. Independent Engineer reviews the technical inputs (i.e. output, efficiency, O&M expenses, availability, etc.) to the financial model used by the lender and the developer/owner to justify the financing of the project.

The Scope of the study includes:-

Review/ Vetting of the cost of the Project and comment on its reasonableness.
Vetting of contracts for various works awarded to the Company including liquidated damages and performance guarantees therein. LIE will also examine the reasonability of these contract prices.
Review the necessary approvals for the construction, adequacy of clearances and any consent, license, approval, registration, permit or other authorization of any nature which is required to be granted by any statutory or regulatory authority or any third party for the construction, operation and maintenance of the project.

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