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Difference between revisions of "SPIS Toolbox - Loan Assessment: Determine Financing Volume and Profitability"
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| − | + | {{SPIS Banner}} | |
| − | = Loan Assessment: Determine Financing Volume and Profitability = | + | === '''<span style="color:#879637;">Loan Assessment: Determine Financing Volume and Profitability</span>''' === |
| − | While the previous process steps focused on the policy makers, the next steps focus on the loan officers who assess single loan applications for | + | While the previous process steps focused on the policy makers, the next steps focus on the loan officers who assess single loan applications for financing SPIS. |
| − | Loan officers generally prefer to use the tools provided by their institution, but it is useful to use the tools '''DESIGN 06- Farm Analysis Tool''' and '''DESIGN 07- Simplified Financial Viability Tool'''as they are specifically designed for SPIS and can provide | + | Loan officers generally prefer to use the tools provided by their institution, but it is useful to use the tools '''DESIGN 06- Farm Analysis Tool''' and '''DESIGN 07- Simplified Financial Viability Tool '''as they are specifically designed for SPIS and can provide a first estimation of viability. In fact these tools can be provided to borrowers/loan applicants to verify their own assumptions. |
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| − | == Outcome / Product == | + | === '''<span style="color:#879637;">Outcome/Product</span>''' === |
*Profitability analysis of investment (and alternatives); | *Profitability analysis of investment (and alternatives); | ||
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*Financial projections on investment costs (CAPEX) (and alternatives); | *Financial projections on investment costs (CAPEX) (and alternatives); | ||
| − | == People / | + | === '''<span style="color:#879637;">People/Stakeholders</span>''' === |
*Loan officers financing or planning to finance SPIS; | *Loan officers financing or planning to finance SPIS; | ||
| Line 29: | Line 29: | ||
*Research and training institutes. | *Research and training institutes. | ||
| − | == Data Requirements == | + | === '''<span style="color:#879637;">Data Requirements</span>''' === |
'''Research, collect, analyze, cross-check''' | '''Research, collect, analyze, cross-check''' | ||
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*sales revenues | *sales revenues | ||
*purpose and sums provided as subsidies or/ and through sponsors; | *purpose and sums provided as subsidies or/ and through sponsors; | ||
| − | * | + | *macroeconomic variables (inflation, interest rates, etc.); |
*tax policies (corporate income tax, VAT dynamics, etc.). | *tax policies (corporate income tax, VAT dynamics, etc.). | ||
| Line 50: | Line 50: | ||
*Payback Period (PP), Net Present Value (NPV) and Internal Rate of Return (IRR) of SPIS investment. | *Payback Period (PP), Net Present Value (NPV) and Internal Rate of Return (IRR) of SPIS investment. | ||
| − | == Important Issues == | + | === '''<span style="color:#879637;">Important Issues</span>''' === |
*Compare PV with alternative pumping solutions and consider varying profitability of different SPIS (crops, size). | *Compare PV with alternative pumping solutions and consider varying profitability of different SPIS (crops, size). | ||
| + | *Work with excellent loan staff. | ||
| − | + | {{SPIS Reference}} | |
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Revision as of 16:21, 26 May 2017
Introduction
The Toolbox on Solar Powered Irrigation Systems (SPIS) is designed to enable advisors, service providers and practitioners in the field of solar irrigation to provide broad hands-on guidance to end-users, policy-makers and financiers. Risks related to system efficiency, financial viability and the unsustainable use of water resources can thus be minimized. The Toolbox comprises informative modules supplemented with user-friendly software tools (calculations sheets, checklists, guidelines). read more
Modules and tools touch upon:
- assessing the water requirements,
- comparing the financial viability,
- determining farm profitability and payback of investment in SPIS,
- sustainably design and maintain a SPIS,
- highlight critical workmanship quality aspects,
- and many more.
Loan Assessment: Determine Financing Volume and Profitability
While the previous process steps focused on the policy makers, the next steps focus on the loan officers who assess single loan applications for financing SPIS.
Loan officers generally prefer to use the tools provided by their institution, but it is useful to use the tools DESIGN 06- Farm Analysis Tool and DESIGN 07- Simplified Financial Viability Tool as they are specifically designed for SPIS and can provide a first estimation of viability. In fact these tools can be provided to borrowers/loan applicants to verify their own assumptions.
|
Note: Transaction costs for loan review can be high, especially if the technology has limited scope for standardization. Using specific tools, and encouraging loan applicants to use the same, can minimize unnecessary effort. |
Outcome/Product
- Profitability analysis of investment (and alternatives);
- Cash flow analysis;
- Financial projections on investment costs (CAPEX) (and alternatives);
People/Stakeholders
- Loan officers financing or planning to finance SPIS;
- Producer(s) / potential borrower(s);
- Management of financial service providers(operational level);
- Agricultural extension services and promotion agencies (e.g. for subsidies);
- Providers of service, technology and inputs;
- Research and training institutes.
Data Requirements
Research, collect, analyze, cross-check
- prices for components to be financed;
- cropping pattern and crop prices (fluctuation,trends);
- prices for O&M costs and inputs (incl. other options);
- sales revenues
- purpose and sums provided as subsidies or/ and through sponsors;
- macroeconomic variables (inflation, interest rates, etc.);
- tax policies (corporate income tax, VAT dynamics, etc.).
Compute, prepare
- water unit cost;
- annual revenue and operating expenses (OPEX) --> Annual gross margin of production (current and future);
- CAPEX (capital expenditure); i.e. total/annual sum for financing investment in SPIS (and alternative system);
- cash flow projections (current, future, alternative energy source);
- life cycle cost of SPIS investment;
- Payback Period (PP), Net Present Value (NPV) and Internal Rate of Return (IRR) of SPIS investment.
Important Issues
- Compare PV with alternative pumping solutions and consider varying profitability of different SPIS (crops, size).
- Work with excellent loan staff.
