FATE Financial Assessment Tool for Electrification

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Last edited on 1/06/2023 by Tapan Kumar
(Date format: DD/MM/YYYY)

Key facts

The financial assessment tool for electrification (FATE) is designed to establish the financial viability of mini grid and solar home system (SHS) projects in rural areas of Nigeria. This tool is addressed to companies, project developers, financiers, and policy makers. The tool was elaborated in a dynamic format, linking all inputs and outputs together, making it easy for the end-user to evaluate electrification projects according to different criteria including: revenues, expenses, and compa

Type of financing

• Grant
• Equity
• Debt

Technology scope

• SHS
• Minigrid

Target beneficiaries

Companies, Project Developers, Financiers, and Policy makers

Geographical scope

Nigeria

Application

Other

URL

Further information

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With MEI’ FATE Tool, project developers, policy makers, and financiers will be able to model and evaluate the economic viability of mini-grid investments. The model only displays the most important features, allowing for an easy input of all key data, as well as providing sufficient feedback to fully understand and analyse the economic performance of the target mini-grid project. It allows consideration of up to three different cash-flows, which may reflect three villages with different economic conditions and performances. To increase the scope of scalability, an unlimited number of villages can be considered for each of the three different cash-flows, representing clusters of villages that have the same economic conditions and performances. All cash-flows of the considered sites are consolidated in the Financial Model to display the company’s overall economic performance. By adding the company’s overhead costs and financing conditions, the income statement and balance sheet of the mini-grid investment can be produced and financial indicators like the Project Internal Return Rate (IRR), the Equity IRR, the Net Present Value (NPV) and the Debt Service Coverage Ratio (DSCR) are calculated.

1. download link 1 to tool (Excel file) #
2. download link 2 to user manual# (still under development)
3. Video with guidance# (still under development)

Figure 1 Schematic description of MEI's financial feasibility assessment tool