Techno Economic Viability Study

Techno Economic Viability Study (TEV) or Viability study or feasibility study is a detailed study conducted to have a comprehensive analysis of Technological aspects of a project as well how viable that project is form financial point of view.

TEV study is a kind of study to mitigate any risks associated with a project and provide the user an insight to make a more informed decision. All the banks and financial institutions conduct TEV study in order to make decisions on whether to lend money or not.

TEV study helps the user to take a view on how much degree of risk involved in the project can be accepted by him. TEV study or feasibility study takes into consideration all types of risks like Technological risk, market risk, regulatory risk, financial risk etc.

For doing viability study, various factors are taken into consideration like historical background of project or business, nature of product or service, financials, management and its operations, marketing policies, legal environment, tax liabilities etc.

TEV study or Feasibility Study covers analysis of various aspects

Economic Aspects

It covers analysis of

  1. How much raw material is required?
  2. What is level of capacity utilization?
  3. What is anticipated sales and expenses and the probable profits.

 

Financial Aspects

It covers analysis of financial requirements of both – fixed capital and working capital and its means of financing.

 

Market Analysis

It includes analysis of what is anticipated market for the product in terms of demand, supply and competitive analysis.

 

Technical Feasibility

It includes analysis of the proposed project in terms of how adequate is its infrastructure, manpower planning, utility requirement, quality control and various other technological processes.

 

Management Expertise

It includes analysis of expertise and competence of management proposed to handle the project.

 

Contents of a normal Techno Economic Viability study report

  • Summary of Company and its business model
  • Details of promoters, Directors etc.
  • Scope of Project
  • Financial Projection of Project
  • Advantage of Project in terms of location, trade and logistics and government subsidy
  • Marketing approach and strategy
  • Technical Analysis of the Project
  • Land, Building, Machinery requirements
  • Manpower requirement
  • Product range and production plan
  • Raw material requirement
  • Power, fuel requirement
  • Production and operating costs requirement
  • Overview of specific industry
  • SWOT Analysis of Project
  • Risk Analysis of Project
  • Recommendation and Suggestions
  • Conclusions
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Author: Anil Agrawal
EZYBIZ India Consulting LLP, New Delhi. The firm is business and tax consultancy firm providing consultancy in Taxation, Regulatory, Transfer pricing, Valuation, Corporate funding and Business set up matters. He may be reached at 9899217778 or anil@ezybizindia.in.

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