United Nations Industrial Development Organization

INVESTMENT STUDIES

Summary Guidelines for EXIM Development Corporation contracted by UNIDO for the preparation of pre-feasibility studies and feasibility studies.

EXECUTIVE SUMMARY

The Executive Summary should summarize the conclusion and recommendations covering all critical aspects of the study and should hav e the same structure as the body of the feasibility study report.

Project Background and Basis Idea

* Project Background
* Name(s) and address(es) of project promoter(s)
* Project Strategy
* Project History
* Economic and industrial policies supporting the project
* Market Analysis and Marketing Strategy

Summarize results of market analysis

* Demand
* Project sales
* Explain marketing strategy
* Target markets

Raw Materials and Supplies

Describe general availability of:

* Raw materials (unprocessed and semi-processed)
* Processed industrial materials and components
* Auxiliary materials
* Factory Supplies
* Utilities
* Spare parts
* List annual supply requirements of material inputs and provide cost estimate

Location, site and environmental assessment

* Describe location and plant side
* Present summary of environmental impacts

Engineering and technology

* Outline production program and plant capacity
* Describe technology selected
* Summarize main plant items (equipment etc.), their amiability and cost
* Describe the layout and scope of the project
* Describe requirements major civil engineering works

Organization and Overhead Costs

* Describe basic organizational design and management

Human Resources

* State selected type and size of labor force
* State selected type and size of staff
* Indicate their costs, amiability, training needs, etc.

Implementation Planning and Budgeting

* Indicate duration of plant erection and installation of equipment
* Indicate duration of production start-up and run-in period
* Identify actions critical for timely implementation

Financial Appraisal

* Total Investment Cost
* List major investment data in local currency and foreign exchange, as needed, for:

Land and site preparation

+ Structure and civil engineering works
+ Plant machinery and equipment
+ Auxiliary and service plant equipment
+ Incorporated fixed assets
+ Pre-production capital costs
+ Net working capital requirements
= Total Investment Costs

Project financing (assumed)

* Source of finance
* Impact of cost of financing and dept. servicing on project proposal
* Financial structure ratios

Total costs of product sold

List annual data for:

Factory costs

+ Administrative overhead costs
= Operation costs
+ Marketing costs
+ Depreciation
+ Financial costs
= Total costs product sold

Financial Analysis

* Net Present Value (NPV)
* Internal Rate of Return (IRR)
* Pay-back period
* Simple rate of return
* Break-even analysis
* Sensitivity analysis
* Economic Cost-Benefit Analysis

Summary of conclusion of project appraisal from the national economic point of view. Only important issues in favor or against the project that could convince the decision maker on the merits/demerits of the project to be presented

* Economic Net Present Value (ENPV)
* Economic Internal Rate of Return (EIRR)

Conclusion

* Major advantages of the project
* Major disadvantages of the project
* Chances of implementing the project