The Techno-Economic Viability (TEV) Study evaluates project technological parameters and their impact on project financial viability. A TEV study is a risk mitigation exercise conducted by banks and financial institutions prior to a bank or financial institution’s lending decisions for projects.

TEV Study lets you Analyse various risks

No project can be completely risk-free, and thus the analysis of the degree of technical risk along with financial viability, via a Techno-Economic Viability Study (TEVS), is to help lenders decide whether the degree of risk involved in a project is acceptable. A TEV analysis considers technological risk, market risk, regulatory risk, and financial risk. A critical assessment of these parameters is required for a meaningful study. It is a continuous process that begins with the development phase and continues until the project is completed.

 

Aim of TEV Study

 

• Banks, engineering firms, asset reconstruction companies (ARCs) as well as other institutions require this study for the following reasons:
• Project loan evaluation
• Project funding (including term loans)
• Reviving distressed assets
• Improve your leadership abilities to better manage your team.
• Reduce costs without sacrificing quality
• Automate your company

 

The primary goal of this research is to gain a thorough understanding of the project descriptions, resource allocations,  accounting statements, legal requirements, tax obligations, financial data and so on. This study is required prior to technical development as well as project execution to determine whether the project is profitable or not.

 

Benefits of TEV Study

• Even before you make a decision on the human resources, time, and effort, you should have a good idea of whether the project is likely to succeed.
• Increase the focus and efficiency of the project team.
• Allow you to spot and seize new opportunities.
• Help you understand the hows and whys of the project before you begin.
• Allow yourself time to streamline your business options.
• Detect problems before they occur and assist in their resolution.
• Allows risk reduction
• Provide valuable insights to team members and stakeholders about all of the project’s possibilities.

 

This study includes all of the elements needed to make an informed decision to accept a project for lending or investment. Rakesh Narula & Co. can provide you with a TEV Report that represents both the positive and negative aspects of a project.

 

Critical Areas

Evaluating the sponsors of the project

 Receiving funds for a business venture is also dependent on the profile of the sponsors. As a result, the personal and financial profiles of the promoters must be included in a TEV report. Their track record is also a significant indicator in determining whether you will receive the necessary funding for your project.

Choosing a capable team to manage the project

The success of a project is also dependent on its people. It is recommended that project members have expertise in areas such as human resources, finance, project implementation, and so on.

Technical evaluation

In order to achieve good results in the future, it is necessary to assess the project’s technical components. In advance, deep study on the most recent technological equipment as well as other important resources is required.

Financial viability

One of the most important aspects of this study is the project’s financial viability. It means that when the project is completed, it must generate sufficient cash flows to pay off the debt. Many factors are considered when determining its financial viability, such as the term loan requirement, capital requirement, ratio analysis, and so on.

Market Analysis

The project idea should meet the demands of the future market. Future demand and supply must be sufficient to meet marketing trends. As a result, when preparing a feasibility study, this factor must be considered.

Simulation analysis/Sensitivity analysis

In this method, you perform infinite calculations to determine the possible outcomes and probabilities of any action. This financial model is frequently used to forecast the outcome of a decision based on a set of variables. In this case, you examine the impact of changes in key assumptions such as selling and raw material prices to determine the project’s financial viability.

 

TEV Study is an essential component of project management, like when starting a new business or expanding an existing one. A reliable study will assist you in reducing project risks and providing you with an unbiased view of the project’s pros and cons. Eliminating flaws in your project before executing will yield huge returns, and you will be able to obtain more funding to make your dreams a reality. As a result, when preparing your study, always select experts from the investment banking field.

About Sapient Services

Sapient Services acquired M/s Malhotra Associates in April 1988. Initially, the organisation concentrated on risk assessment, damage assessment, plant and machinery valuation, Chartered Engineer certification, and third-party inspection. Sapient Services Pvt. Ltd., based in Mumbai, is a government-registered valuer that employs chartered engineers, insurance surveyors and loss adjusters, risk inspectors, and assessors. In comparison to other organisations, it provides superior Chartered Engineering Services. Since its inception seventeen years ago, the organisation has handled over 15000 cases involving marine cargo, engineering, fire surveys, and various size claims.