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1. Summary of the total project cost.
2. Sources of funding of the project cost.
3. Detailed financial projections to include balance sheet, profit and loss and
cash flow statements (the projections should cover the tenure of SIDF loan and
should not be less than five years).
4. Financial indicators such as financial ratios; break even analysis, internal
rate of return, value added, etc.
5. In preparing financial projections, you should bear in mind that the Fund:
- Will not allow dividends (or withdrawals) to be paid before the first year of
the Fund’s loan repayment and then the lesser of 25% of paid up capital or
SIDF loan maturities for the year.
-Will require owner’s capital to represent no less than 25% of the project’s
cost and frequently more.
- To reduce financial burdens on the project, SIDF Capital will usually permit
Commercial bank finance to be drawn down after the borrower has invested all
his equity and after fund finance, and to start repaying the loan earlier than
the Fund’s loan.
- Requires projections to be prepared on a current cost basis don’t include any
element of inflation in costs in future years.
- Requires the assumptions on profit and loss account and balance sheet items
to be clearly spelled out.
- The project should to be viable on its own merit, (i.e., no reliance on
government subsidy or tariff protection).
- Accounting method(s) and percentages for calculating the depreciation,
maintenance and amortization must be clearly stated.
- Any other costs required to run the operation must be clearly stated.
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