Template Information Required Pfsa

DBSA INFORMATION REQUIRED: Funding Proposals (Issued without prejudice)

Below is an indicative list of the information and documentation that the DBSA needs in order to proceed with applications for financial assistance. This information should be available in the form of a comprehensive Business Plan/Project Information Memorandum. DBSA is, in principle, willing to consider a loans and equity investments in the sectors that fall within its official mandate, subject to the results of due diligence processes and agreement on the terms and conditions of such investments. 1.

General/Introductory Overview of the Project Description of the project; the bidding process followed (if any); rationale; sponsors (the initiators of the project/owners/main shareholders); capital structure (how much equity provided by whom, how much debt to be secured from whom); history (background); timing; total investment required and role expected of the DBSA; etc.

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Macro-Economic and Social Context of the Project

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Key economic data – national, regional & the project area (demographics, income, employment, socio-economic conditions in the project area, sector information e.g. current costs of energy in the country, waste management situation and health threats if allowed to continue etc.) Development challenges and priorities in the relevant sector. Confirmation of how this project will contribute towards addressing key economic and social challenges (must talk to the 1st bullet point). Importance of the specific sector in the economy of the country/region/area.

How the project will enhance development within the particular sector? (concrete examples and figures). Information on the Sponsors / Promoters Description of the main sponsors (experience, activity, financial position, etc.). Shareholders Agreements (i.e. agreements between the project company/SPV and the various shareholders, directors agreement, key person contracts etc. - these need to be in place before the first payment can be made and copies must be filed with the bank). Organization of the project company (structure; legal status; as well as the company’s registration number, certificate of incorporation, etc.). The sponsor’s financial capacity (an undertaking will be required from the sponsors to fund any cash shortfalls and not to abandon the project before the first disbursement). Capacity to implement the project (CVs and preferable authentic references). Experience/track record in similar projects.

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Contractual Arrangements/Regulatory Issues Legal requirements for the project: licences, rights, leases etc. Constitutive (as indicated above) documents of the project company. Main operating agreements supporting the project (management; contractors; procurement; off-take agreements, supply agreements; maintenance; etc.). Government role and impact on the project (required approvals; regulations; etc.), and progress regarding finalization of these. The Market – A Comprehensive Assessment of Market Viability A comprehensive description of the market opportunity, and how it is to be approached. Detailed explanation of revenue model/assumptions (how will the project generate income?) Market situation analysis (e.g. product; industry analysis; competition; value added; market shares; price structures; etc.). Sales volumes and tariff data if applicable (existing or assumed values in the projections). Marketing strategy (objectives; segments; pricing; promotion; logistics; etc.). Operational and Technical Management of the Project Preparatory studies and surveys – required/completed/outstanding. Description of the design aspects: technology/process (process; patents; maps; plans; etc.). Organization of operation/corporate organization of operations (including personnel policies and staffing requirements) Environmental impact assessment (EIA) and environmental management plan (EMP) (if applicable), together with a Record of Decision from the relevant Province. Land regime (titles; restitution issues if any etc.) – (if project requires acquisition of land/property) Implementation arrangements: o Project management arrangements. o Supporting infrastructure (requirements). o Contractual arrangements. o Status of government approvals. o Acquisition of rights-of-way. Capital cost components. Operating costs: o Operating costs components. o Working capital. o Pre-operating expenses.

Financial Projections/Forecasts of the Project Main players (financiers; advisors; arrangers; etc.). Business plan (objectives; resources; roll-out period; milestones).

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Project costs (pre-operating; CAPEX (capital expenditure); OPEX (operating costs); etc.). Funding structure (equity; debt; cash from operations; etc.). Main financial agreements (e.g. sponsor support agreements). Financial model in detailed form, including an electronic version thereof (main results sheet; financial ratios; assumptions; market; cash flows; funding; tax; profit & loss; balance sheets). Sensitivity analysis; securities; tax matters; foreign exchange matters; Insurances; distribution policies; etc. Economic and Development Impact of the Project Socio-economic assessment (cost-benefit analysis of the project). Empowerment issues and development of small/medium enterprises. Capacity building and transfer of skills. Community benefits and social impacts of the project.

The documentation should also include a Risk Analysis, as well as any other relevant information on the project and its background. (It works quite well to think of all possible risks and to include a table which indicates how these risks will be mitigated/addressed – sort of SWOT analysis). Please also note that the DBSA will enter into a formal Mandate Agreement with the sponsor(s)/promoter(s) or their agent/advisor before proceeding with the appraisal (due diligence). It will be expected of the sponsor(s) to carry the full costs associated with the appraisal process (e.g. travelling, accommodation, professional services, etc.). Project Finance SA Private Sector and International Investments Division Development Bank of Southern Africa Limited