How to Prepare an Industrial Investment

1. Stage gates and study classes

Each gate should cost roughly an order of magnitude more than the last and reduce uncertainty proportionally. Spending feasibility-level money on a concept that has not passed strategic screening is the most common source of wasted development budget.

• Concept: strategic fit, market logic, ±40–50% cost view
• Pre-feasibility: options analysis, Class 4 estimate (±25–30%)
• Feasibility: defined scope, Class 3 estimate (±15%), full model
• Bankable: independent review, permits, contracts, financing structure

2. Technical preparation

Technical work must reach the level the estimate claims. A Class 3 estimate requires a defined equipment list, layout, utility schedule and construction methodology — not a supplier budget quotation multiplied by a factor.

3. Financial model requirements

Build the model to lender standards from the outset: monthly construction drawdown, ramp-up curve, working capital, tax and depreciation, debt service, covenant tests, and sensitivity on price, volume, yield, FX and CAPEX overrun.

• IRR, NPV, payback and DSCR reported together
• Ramp-up modelled explicitly, never day-one nameplate
• Sensitivities and break-even on the three variables that matter most
• Downside case that still services debt

4. Timeline to financial close

Six to eighteen months from feasibility completion to financial close is normal, depending on lender type. Development banks and ECAs run longer diligence than commercial banks but offer better tenor and pricing.

5. Procurement alignment

Financing conditions shape procurement. Content-origin requirements, contract form, completion guarantees and environmental and social standards must be reflected in tender documents before award.

6. Risk and ESG

Environmental and social assessment is a gating requirement for most institutional lenders. Start it early — retrofitting an ESIA to a designed project can cost a year.

7. The bankable documentation pack

Assemble one controlled pack: feasibility study, financial model, technical scope, permits register, land and site evidence, offtake and supply agreements, sponsor financials, ESG assessment and contract structure.

8. Selecting the financing route

Match instrument to project: commercial debt for proven expansions, ECA-backed facilities for imported equipment, development finance for food security, energy and infrastructure, leasing for replaceable assets, equity for pre-revenue risk.

9. Governance after approval

Carry the same discipline into execution: monthly cost and schedule reporting against the approved baseline, formal change control, and a post-completion review that feeds the next investment.

Buyer checklist

Use this as a readiness test before committing capital or issuing an RFQ.

1. 01Stage gates defined with decision criteria at each gate
2. 02Study class matched to the technical work actually done
3. 03Financial model built to lender standard with sensitivities
4. 04Ramp-up curve modelled, not assumed away
5. 05Permits and land evidence assembled
6. 06ESG assessment started early
7. 07Offtake and supply agreements progressed in parallel
8. 08Financing route selected before procurement award
9. 09Independent technical review commissioned for bankable stage
10. 10Post-approval governance and change control defined

Common mistakes

Frequently asked questions