A Techno Economic Viability (TEV) Report is a detailed assessment of the technical feasibility, economic viability and financial sustainability of a proposed project.
The primary objective of a TEV study is to determine whether the proposed project has the technical capability, market potential, financial strength and repayment capacity required for successful implementation.
TEV Reports are particularly relevant when a project is being considered for term lending, project finance, institutional funding, investment or major capital expenditure.
We review the promoter background, existing business activities, experience, financial position and proposed contribution to the project.
The proposed project size, capacity, location, products, technology and implementation plan are assessed.
The technical aspects of the project are examined, including:
The proposed project location is assessed in terms of accessibility, availability of raw materials, utilities, transportation, labour, infrastructure and other project requirements.
The study examines market demand, industry conditions, competition, pricing, customer segments, sales potential and market risks.
The proposed installed capacity and expected capacity utilisation are reviewed to determine whether the capacity is commercially and operationally appropriate.
The estimated project cost is reviewed against major components such as land, building, machinery, utilities, pre-operative expenses and working capital.
The project is evaluated through financial projections and indicators such as:
For projects involving loans, the ability of the project to generate sufficient cash flow for repayment of principal and interest is analysed.
The impact of changes in important assumptions such as selling price, raw material cost, production volume, operating expenses and interest cost can be assessed.
Key technical, commercial, financial, operational and regulatory risks are identified.
The report brings together the technical, market and financial findings to provide an evidence-based assessment of the project’s viability for the intended financing or investment purpose.
TEV studies can be useful for:
