TEV observe is a danger mitigation project undertaken in recognize of any commercial interest earlier than a choice taken via way of means of the bank, whether or not the Bank need to lend for such undertaking or not.
Techno Economic Viability (TEV) Study presents undertaking appraisal for technological parameters and their effect on economic viability. Undertaken via way of means of banks and economic establishments, a Techno Economic Viability observe is a danger mitigation exercising performed earlier than banks or economic establishments` choices on its lending choices for projects.
No undertaking may be danger-free. Hence, the evaluation of this diploma of technical danger related to economic viability thru a Tehno Economic Viability Study (TEVS) assists creditors in taking a one of a kind angle at the acceptability of the diploma of danger worried in any undertaking. It considers an evaluation of technological danger, economic danger, marketplace danger, and regulatory danger. A crucial assessment of those parameters is crucial for a applicable Techno Economic Viability observe. Sapient has the proper ability units to deliver, assists economic establishments and diverse banks in undertaking a TEV observe.
The bank’s decision to lend is based on the risk involved with the proposed project. The risk is assessed in terms of its potential impact on the bank’s credit rating, as well as its possible impact on the ability of the bank to meet its financial obligations.
The bank exercises extreme caution before making any lending decision, as it does not wish to place itself in a position where it could be forced to take action that would be likely to have serious consequences for the institution. The bank assesses the risk of lending by using a number of techniques, including:
-Financial analysis that compares the project’s cash flow with its debt service requirements. This analysis is based on assumptions regarding future interest rates, inflation and other factors that could affect the project’s ability to generate sufficient revenue to meet its obligations. -Analysis of the borrower’s financial condition and ability to repay the loan.
This is done by determining how much debt the borrower can bear, based on a variety of factors including: -the project’s cash flow, -the amount of equity invested in the project by other parties (if any), -the borrower’s financial strength and ability to service its existing debt,
The borrower’s ability to raise additional equity capital, and -the borrower’s financial projections, including the project’s cash flow. -Analysis of the project as a whole. This involves determining whether the borrower has sufficient funds available to support the project in case of unexpected construction delays or cost overruns.
It also involves determining whether the borrower has sufficient funds available to support the project in case of unexpected declines in revenue or increases in operating expenses. The lender will look at a variety of factors, including: -The project’s expected cash flow, -The amount and terms of debt already outstanding against the property, -Whether any equity has been invested by other parties (if any),
It considers an evaluation of technological danger, economic danger, marketplace danger, and regulatory danger.