What Makes a Project Bankable

Ian Greenstreet, Chairman at Infinity Capital Partners & Board Director at Diamond Bank
Published: Sun 05 May 2013
 



A bankable project requires careful and professional planning, says Ian Greenstreet, Chairman at Infinity Capital Partners & Board Director at Diamond Bank. He suggests the following when planning for a bankable power project:

  • You need the right experts and advisors during the planning process
  • The right engineering, procurement and construction contractors must be employed from the beginning
  • A project needs sponsors, with high performance metrics and shared values
  • Location, resources and financial backing must be properly assessed before the project commences
  • A proper framework and tariff regime must be in place because political backing can be unreliable
  • Must have the right fuel supply for the project
  • The right commercial structure is key-must be self sustainable for lower risk
  • Varied number of customers (industrial, retail, utilities) and ensuring their credit worthiness before signing a long-term contract
  • Do not rely heavily on government for support as misjudgements can occur.
Mr Greenstreet suggests that more private power supplier sectors should take the lead in Africa and local lending be increased to ensure sustainability of local projects. Homegrown skills are also key.

He adds that a decentralised power approach for Africa is the way forward as locals are given ownership of their power needs which encourages economic activity.