Project Finance

Banks and financing institutions (whether or not involved with venture capital) need an independent assessment of project's technical and economic feasibility, together with supervision services during execution.

The Project Financing approach is being widely used for the development of new investment projects.

At an early stage it is important to identify and select only those projects that can demonstrate to have a low degree of risk and can secure reimbursement of debt. Nevertheless, it is difficult and costly to gather information and all the professional skills that are needed to produce a reliable assessment for a "go-no-go" decision. All aspects of the project have to be analyzed in detail: background, infrastructure, location, Engineering and technology, O&M, organization and execution plan, planning & budgeting, cash flow, IRR, DSCR, etc.). A quantitative risk analysis is performed on the basis of the Monte Carlo methodology supported by the Prima3 expert system. Short-cut selection parameters are often identified, just like the probability that the IRR and final debt fall below defined cut-off ceilings.

It is often necessary to define or review the contract frame that would ensure the feasibility of the project. Proper securities have to be incorporated properly in all the key contracts, like Sales & Purchase agreements, EPC contracts, license agreements, etc. (see also Business Information).

The use of an expert system like Prima3 (Project Investment Management) enables to gather and analyze the available information and to quickly support the "go-no-go" decision.

In case of need, BEN supplements data with its own information to complete the analysis.

Once the project has been given a start, it is necessary to control the activities and notify any deviation with respect to time, cost and quality. Physical progress, cost and quality are to be monitored during all the phases of project execution, including O&M. A key tool for the analysis of cost and progress is the Prima3 expert system.
 

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