INTERNATIONAL FUNDING COMPANY
CHARACTERISTICS OF A FINANCEABLE PROJECT:
2. The contractor(s) responsible for design, engineering and construction of the project
should be financially sound and possess the required technical expertise.
3. Government approvals as required for the project must be obtained.
1. Forecasts of internally generated cash flows must be realistic and supported by
independent engineering and feasibility studies or through our technical-financial guideline.
Cash flow must cover forecasted operating expenses, debt servicing, ordinary cash needs
and a cushion for contingencies.
4. The political environment should be stable as well as compatible with various aspects of the project.
7. Transportation costs both for materials and products for the projects must meet financial
8. Demand for products/services of the project must be reasonably assured at levels and
prices consistent with forecasts.
5. The process and equipment to be used should be reliable and reputable.
6. Suppliers of materials and energy to operate the project must be reasonably assured and at
a cost consistent with forecasts.
10. Insurance is required to protect against all necessary risks during both construction and
operation of the project.
9. Management and technical expertise to successfully start up and operate the project must
12. Credit support for the project is often required either by the sponsor or by a third party.
13. A credit risk, not an equity risk, must be involved. Financial institutions wish to take only
the role of lender and therefore avoid taking equity in the project.
11. The sponsors should have an equity position in the project in proportion to their interest