Securing project finance from commercial or public sector banks requires promoters to submit a robust appraisal dossier. A Techno-Economic Viability (TEV) study evaluates whether a proposed industrial project is technically feasible and commercially viable under various market scenarios.
What Goes into a TEV Appraisal?
A comprehensive TEV study covers several critical parameters:
- Technical Analysis: Evaluating technology choices, plant configuration, raw material accessibility, utilities, and civil layouts.
- Financial Appraisals: Reviewing capital cost estimates, financial modeling, Debt Service Coverage Ratio (DSCR), Internal Rate of Return (IRR), and break-even analysis.
- Market & Risk Assessment: Analyzing demand-supply gaps, pricing power, regulatory environment, and competitive threats.
How Banks Use TEV Studies
Credit committees use TEV studies to gauge the safety of their loan exposure. A well-prepared TEV report by an empanelled consultant like V Technocon ensures that credit proposals are processed faster with minimal queries.