Tuesday, September 27, 2016

how to prepare a project report for bank loan

How to prepare a project report?

BRIEF DESCRIPTION OF THE PROJECT AREA

  • Name of  utility and distribution cycle .
  • District town village covered
  • Location  latitude and longitude
  • Area population and boundaries
  • Climate condition
  • Status of development , access to electricity
  • Economic structure socio economic feature
  • Predominantly urban rural
  • Data collection of existing system
  • Category wise number of consumers and connected load
  • Peak demand
  • Annual energy consumption
  • Sub transmission system and distribution system
  • Single line diagram and of sub transmission and distribution network
  • Equipment parameter data


DATA VALIDATION
  • Correctness and consistency of data collection.


Project cost details

  • Basic equipment cost
  • Duties taxes and fright  (Exercise duty , custom duty , sales tax)
  • Freight and transit insurance
  • Civil engineering works (foundation / building)
  • Erection works (storage/ handaling/ installation / t&c )

MAJOR BENEFITS FROM THE PROJECT
  • Reduction of losses
  • Additional sale
  • Improved reliability and availability

PROJECT INVESTMENT CRITERIA
  • Cost benefit analysis
  • Investment criteria
  • Payback period

Discounted cash flow technique

a)net present worth
b)benefit cost ratio
c)internal rate of return


project investment criteria

  • payback period
  • ·         Length of time required by the cumulative net cash inflow to cover up the fixed capital investment


Payback period                =                            total capital investment
                                                             Total cash inflow or net benefit /year
  • ·         Easy to understand
  • ·         Investment should include fixed capital and working capital
  • ·         Net benefits to be adjusted for interest and tax liabilities.

PROJECT INVETMENT CRITERIA

  • Discounted cash flow technique
  • A technique which brings past and future cost benefits to their present worth
  • Takes into account  time value of money


DCF TECHNIQUES
  • Past benefit cost – compounding
  • Future benefit cost- discounting


NET PRESENT WORTH

NPW= present value of incremental benefit – present value of cost

Selection criteria npw =0 or <0 p="">
·         
       Internal  rate of return  (IRR)
Discount rate at which the npw of project is equals to 0
                               Or
It is the maximum interest rate that a project can pay and still breaks even

DPR structure
  • Title page: name  affiliation and date etc
  • Acknowledgement
  • Content  list
  • Abbreviation
  • Executive summary
  • Introduction background
  • Recommended action plan
  • Technical and financial analysis chapter
  • Appendices


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