Business process of working with an investment project in a company and a bank
The business process of the project initiator with the project during its life cycle includes the following stages (stages) of work:
• Project initiation, development of project documentation, planning of work and events;
• Project analysis and justification of its effectiveness and investment attractiveness, development of a business plan;
• Search for investors and creditors, the formation of a group of stakeholders of the project choosing the form of project financing;
• organization of financing, signing of contracts;
• project execution;
• project monitoring, settlements with creditors, investors;
• the achievement of the goal of the project, the completion of the project.
The business process of the bank's work with the project includes the following stages (stages) of work (Figure 1.2):
• Receiving the project documentation in accordance with the criteria and provisions of the bank's investment policy;
• Project expertise based on its complex analysis;
• Decision making by the bank on participation in the project and participation form;
• organization of financing, signing of contracts;
• project financing;
• monitoring of the project in the interest of the bank;
• settlements with the borrower, receipt of the income of the bank as a shareholder;
• Exit the project.
Basic principles of modern design analysis. Analysis steps
A special role in project financing is provided by project analysis, the purpose of which is to determine the feasibility and effectiveness of implementing an investment project.
• Project analysis is the most important stage of work with the investment project, carried out both by the project initiator and by all parties involved in the project implementation (investors, suppliers, buyers of products, etc.).
The project initiator at the pre-investment stage of the project conducts a project analysis to identify all the factors affecting the project, risks, determine the social and economic efficiency of the project, the appropriateness of its implementation and organization of financing. The results of the project analysis are reflected by the project initiator in the business plan of the project.
Project analysis remains also the main method of project examination by a financial institution (bank, fund) and other possible investors with a view to making a decision on participation in the project (participation form, tools, cost of used financing instruments). The expertise of the investment project itself is a process of analyzing its compliance with the requirements of a commercial bank (or other financial institution) reflected in the bank's investment policy and relevant regulatory documents of the bank.
Project analysis is an essential tool for monitoring the investment project that is being implemented, and an integrated assessment of its effectiveness throughout the life cycle of the project.
The results of the project analysis are used only for making a decision on its implementation, but also to ensure that the actual effectiveness of the project is consistent with its calculated effectiveness, as presented in the business plan of the project. Thus, project analysis should be used at all stages of the project life cycle.
The main principles of project analysis are:
• Systematic, i.e. accounting for the entire system of relationships between project participants and their economic environment, the most important factors affecting the costs and results of each participant, as well as internal, external and synergistic effects. For such an account, the description of the project should include a description of the possible mechanism of interaction between all project participants (the organizational and economic mechanism for project implementation);
Fig. 1.2. Business process of work with the investment project in the bank:
PPP - public-private partnership, PC - project company, SD PC - board of directors of the project company, ts.b. - securities
• the complex nature of the project analysis (and project expertise), which involves the use of various types of project analysis and the preparation of a comprehensive business project plan (or conclusions on the results of the examination);
• consideration of all the most significant consequences of the project. In assessing effectiveness, all the significant consequences of the project implementation, both directly economic and non-economic (social, environmental, impact on the country's security) should be taken into account. In cases where the impact of such consequences of project implementation on effectiveness is quantifiable, it should be carried out. In other cases, consideration of this influence should be carried out expertly;
• carrying out the analysis of the project throughout its life cycle (by individual participants - before the project is exited);
• application of modern international standards for project management and project evaluation;
• the correspondence of the development strategy and the investment policy of the country, region, company (bank),
• the presence of a positive social socio-economic effect of the project;
• The high quality and sufficiency of the project and other documentation necessary for the preparation of the business plan of the project (or the examination of the project in the bank).
Main types of project analysis:
• Strategic analysis of the project;
• analysis of the technical feasibility of the project and the innovative potential;
• Legal, institutional analysis;
• Environmental analysis of the project;
• commercial analysis of the project;
• financial and economic analysis of the project;
• Project risk analysis, including sensitivity analysis and stress testing, modeling the impact of risks on the project's operational flows, taking into account the volatility of the impact conditions and factors;
• express analysis.
The Bank, at the stage of expertise, conducting project analysis, develops an optimal project financing plan and a contractual framework for dividing the overall risks of the project.
Degree of depth and volume of analytical work in project analysis depends on the scale of the project, its capital intensity, social and economic consequences of its implementation. For capital-intensive projects worth more than 500 million rubles. a more detailed and in-depth analysis of the project is needed. For projects of lower cost, the project analysis can be performed according to a simplified scheme that does not require external experts to conduct technical, legal and environmental analysis of the project.
The business process of the project analysis in the initiator company is commenced by the creation of a business plan that corresponds to the recommendations (requirements) of the financial institution/bank that the project initiator is planning to contact.
The business process of project analysis in the company executing the project is carried out throughout the life cycle of the project.
The business process of analysis/examination of a project in a commercial bank can include two stages - a preliminary and complex examination of the project. This approach is typical for banks that finance large investment projects of high cost and socio-economic importance.
At the stage of preliminary examination, the preliminary verification of the investment project's compliance with the bank's investment policy is based on the principles of project selection by the bank for financing. The purpose of the preliminary examination is to determine the feasibility of further consideration of the project at the stage of a comprehensive examination. Based on the results of the preliminary examination, the collegial body of the bank makes a decision on the expediency (inadvisability) of carrying out a complex project examination.
Comprehensive expertise requires the initiator of the project to submit additional more detailed information and documents supporting it, about the project and the project participants. The purpose of the complex project examination is to analyze the feasibility of the bank's participation in financing the project in question and prepare an opinion for the credit committee on the scope, conditions and forms of the bank's participation in project financing.
Modern project analysis includes rapid analysis, strategic, technical, commercial, institutional, project risks, environmental, financial and economic.
Each type of analysis has specific goals (Figure 1.3) and evaluation criteria. The multicriteria approach is used in project analysis in all international methods, including the EU Guidelines for Project Evaluation and the GRI (Global Reporting Initiative) standards for sustainable development.
Fig. 1.3. Structure and objectives of the project analysis
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