Having established that your business or project is eligible for IFC funding by meeting the stipulated criteria highlighted in our last publication, the next course of action is to submit the Investment proposal.
Proposals can be submitted to IFCs industry departments; regional departments at IFC headquarters in Washington; or the regional field office closest to the location of the proposed project. We had shared the address of the regional office in Nigeria, which is manned by a country Manager, in the last article.
- Read also: NLNG: The Rare Success Story in the Nigerian Oil & Gas Sector
Although there is no standard application form for IFC financing, the investment proposal is expected to have the following preliminary information;
- Brief description of the project/business
- Sponsorship, management & technical assistance:
- History and business of sponsors, including financial information.
- Proposed management arrangements and names and curricula vitae of managers.
- Description of technical arrangements and other external resistance (management, production, marketing, finance, etc.
- Market & sales:
- Projected production volumes, unit prices, sales objectives, and market share of proposed venture.
- Potential users of products and distribution channels to be used.
- Present sources of supply for products.
- Future competition and possibility that market may be satisfied by substitute products.
- Tariff protection or import restrictions affecting products.
- Critical factors that determine market potential.
- Technical feasibility, manpower, raw material resources & environment:
- Comments on special technical complexities and need for know-how and special skills.
- Possible suppliers of equipment.
- Availability of manpower and of infrastructure facilities (transport and communications, power, water, etc.).
- Breakdown of projected operating costs by major categories of expenditures.
- Source, cost, and quality of raw material supply and relations with support industries.
- Import restrictions on required raw materials.
- Proposed plant location in relation to suppliers, markets, infrastructure, and manpower.
- Proposed plant size in comparison with other known plants.
- Potential environmental issues and how these issues are addressed.
- Investment requirements, project financing, and returns:
- Proposed financial structure of venture, indicating expected sources and terms of equity and debt financing.
- Type of IFC financing (loan, equity, quasi-equity, a combination of financial products, etc.) and amount.
- Projected financial statement, information on profitability, and return on investment.
- Critical factors determining profitability.
- Government support & regulations:
- Specific government incentives and support available to project.
- Expected contribution of project to economic development.
- Outline of government regulations on exchange controls and conditions of capital entry and repatriation.
- Timetable envisaged for project preparation and completion.
Having submitted the proposal, a preliminary review of the proposal will be made. IFC may proceed by requesting a detailed feasibility study or business plan to determine whether or not to appraise the project.
What follows next after the appraisal? The best way to answer this question will be to look at the IFC’s project/investment cycle which illustrates the stages a business idea goes through, as it becomes an IFC-financed project.
The question therefore is; what is the IFC’s project/investment cycle?
Written by;
Nnamdi M.
