Development of Major Capital Projects

The main objective of the Development phase is facilitating investment decisions for major capital projects. The Development phase is critical for major capital projects as it serves as the final gate for obtaining any corporate management’s Approval For Expenditure (AFE) or otherwise via “Go”/”No-Go” Decision.

The Development phase or “pre-FEED” (Front-End-Engineering-Design) covers specific activities such as strategy, evaluation, planning and definition from “Concept-To-Operations” with emphasis on capital expenditure (CAPEX) and operating expenditure (OPEX) with prime goal to improve asset performance, increase value, reducing costs and lowering risks.

This methodology and approach, covering entire life cycle and value chain, is applicable to multiple sectors including, but not limited to, natural resources (conventional, alternate, renewable energy, mining & metals etc.) and infrastructure sectors.

Most of these major capital projects typically undergo structured project finance (non-recourse, limited recourse, total recourse) and the important pre-Financing phase specifically covers; Feasibility, Permits & Clearances and Contracts. Project developers undertake a considerable number of studies, reports and analysis during the Feasibility phase covering technical, economic, financial, commercial, regulatory, environmental and social aspects. These activities, in turn, have a direct impact on securing Permits & Clearances as well as various transactional Contracts which are “sacro-sanct” with “back-to-back” arrangements.

In summary, the Development phase is vital to enhancing “bankability” of major capital projects while ensuring syndication of equity and debt leading to successful Financial Closure.