Feasibility studies.

What the study is for

A feasibility study earns its cost by surfacing the things a lender or investor will object to, while there is still time and structural flexibility to deal with them.

Projects usually stall before financial close for a familiar reason: a problem appears late, once the structure is fixed and the cost of changing it has risen. We therefore write for the reader looking for grounds to decline. Each risk is set out with its cause, the party carrying it, and what would have to change for a financier to accept it. Open questions are named as open questions.

Selected experience

• 300 MW solar PV, Tajikistan, taken from pre-feasibility into government negotiations
• 250 MW CCGT, Senegal, feasibility study, tariff determination and PPA negotiation
• 20 MW thermal with 20 MWp solar and 14 MWh storage, Sierra Leone, captive power against grid connection
• 300 MW wind and 200 MWp solar, Morocco, private PPA under the national IPP framework
• Run-of-river hydropower, West Africa, pre-feasibility and regulatory review

Revenue and the offtaker

The tariff matters less than whether it gets paid. We examine the offtaker’s payment record, the security package behind it, and whether sovereign or guarantee support is real or nominal. A strong tariff from a weak buyer is a weaker project than a modest tariff from a reliable one, and lenders price it that way.

Specialist technical advisers

Much of the risk in a feasibility study sits in areas where general infrastructure experience runs out. Hydrology on a run-of-river scheme, geotechnical conditions on a port, marine route survey on a subsea cable, raw material chemistry and kiln configuration on a cement plant: each needs a specialist who has done that specific work in that specific environment.

We identify which specialists a project requires, write their scopes so the outputs feed the financial model and answer the questions a lender’s technical adviser will ask, run the selection, and manage the interfaces between them. Appointing a capable generalist where a specialist is required is one of the more expensive mistakes available at this stage, because the resulting gap is normally found during lender due diligence, when remedying it delays close.

Local regulatory and legal support

Licensing regimes, land tenure, permitting sequences, tax treatment, foreign exchange rules and local content requirements differ by jurisdiction and shift with little notice. International counsel structures the transaction. Local counsel tells you how the regulator has actually behaved over the past three years, which ministry signs what, and how long each step has taken in practice.

We engage local legal and regulatory advisers in-country and early, treating their input as evidence in the study itself. Land access, grid connection consents, generation licences and environmental permits each carry their own timetable, and those timetables usually set the development schedule.

Where technical uncertainty becomes commercial

Design, site investigation and resource measurement sit with the appointed specialists. Our task is working out which of their open questions costs money. A hydrology record that is too short, a grid connection that remains unconfirmed, a fuel supply that depends on infrastructure someone else is building: each becomes a condition precedent, a contingency line, or a reason for a lender to reduce leverage.

Cost estimates

Capital cost at feasibility stage carries an accuracy range, and we state it. The build-up draws on recent EPC awards in comparable markets, with contingency shown separately and the basis of estimate recorded. A single confident figure reads well in a board pack and carries less weight with a lender.

Risk allocation

Construction, operating, resource, offtake, fuel supply, currency, change in law and force majeure risk are set out in a matrix, with the allocation tested against what the market has accepted on comparable transactions. Where an allocation is unusual, we say what it will cost to hold and what it would take to move.

The financial model

Cash flows are built to the FAST Standard, to which GIA is a signatory. Inputs, calculations and outputs stay separate, one calculation to a row, nothing hard-coded inside a formula. A lender’s adviser can then open the model, follow it and test it without rebuilding it, which saves weeks during due diligence.

Financing and consents

We set out the likely debt and equity structure, which lenders are plausible and on what tenor and currency, and the licences or concession terms the project must satisfy. Environmental and social risk is scoped against the IFC Performance Standards by default, and the Equator Principles where the lending group requires it, with substantive studies delivered by appointed specialists.

What you receive

A report setting out the project case, the assumptions behind it, the sensitivities that move it, and a list of everything unresolved with an owner and a deadline against each item. It is written for handover to a financier in the form it arrives.

Feasibility studies: common questions

How does a feasibility study differ from pre-feasibility?

Pre-feasibility compares options, identifies the major constraints and answers whether further spending is justified. A feasibility study takes the preferred option and develops it far enough for a financier to assess, which requires open questions to be named and scoped.

Do you carry out the technical studies yourselves?

No. Technical design, site investigation, resource measurement and environmental studies are delivered by appointed specialists selected for the specific asset class and jurisdiction. We scope their work, run the selection, manage the interfaces and translate their findings into the commercial case.

Can a feasibility study support financing discussions?

That is its purpose. A study that sets out assumptions, sensitivities and unresolved items clearly gives lenders something to work with. Financiers will still commission their own due diligence, and a well-built study anticipates what they will ask.

What accuracy should cost estimates carry at this stage?

A range, narrowing as design definition, geotechnical information and EPC market testing advance. We state the basis, the contingency and the width of the range, so the reader can judge how much weight the financial case will bear.

What if the study concludes the project does not work?

Then it has done its job at a fraction of the cost of finding out later. More often the answer is conditional: the project works if a particular risk can be moved, priced or covered. The study sets out what that would take.

Related expertise

• Pre-feasibility studies
• Financial modelling
• Project development
• Transaction advisory