Preparing your Project

Proposal
The main document that needs to be uploaded to the project
application is a Project Proposal: a concise and credible plan that is
straightforward and easily understood by evaluators and reviewers. It
should provide enough detail to give evaluators a clear idea of the
project rationale, structure and management, investment ask and
returns, risks as well as climate benefits and any developmental,
social and gender impacts.
If you do not have a Project Proposal yet, this may seem like a lot of
work, but following our guidelines may help you define your project
more clearly, and it will help you convince others, including PFAN, that
your project is worth working with.
It is not necessary to address every every question or item in the
guidelines – elaborate on those relevant to your project and for
which you have information available. Any areas requiring further
work will be covered during the coaching offered by PFAN to the
selected projects.
Please note the following:
 The Project Proposal document should be maximum 20 pages long, in
MS Word or PDF format (.doc or .docx or .pdf). Other formats, such as
PowerPoint slide decks, are not accepted.
 Proposals exceeding the data limit of 20MB or the page limit, or
submitted in other file formats than those provided above, may be
disqualified.
 Please ensure the information in the Project Proposal is in line with
the information provided in the online application form and other files
submitted (such as the Financial Model and Executive Summary).
 Ensure the Project Proposal is factual and realistic. Document your
claims and proposals where possible and provide supporting data,
using diagrams, charts and graphics where appropriate.
1. Project description, ownership and management team
Ownership Ownership structure (Who)
structure
(Who)

Goals (What) Is it a build-operate-transfer project, a privatisation, a green

field project, a scale up of existing operations? What is being
done, offered, acquired, sold, and distributed? What are the
goals?

Purpose What problem is being solved/addressed by your

(Why) company/project?

Location Region/place of operation and distribution/sales. How

(Where) strategic/positive is the location for the project?

Timeframe Is it an operating company or a new project. What have been

(When) the milestones so far, what is the future time table for
implementation?

Resources Management team, required financing, technology, permits,

needed (How) construction contracts, additional basic infrastructure
 investments pre-project, supporting regulations, strategic
partners (synergies), local authority’s role/support.

2. Market analysis (commercial rationale)

Target market Local/domestic? International? Barriers to entry?
Opportunities and threats. Existing physical,
logistical and commercial infrastructure in place,
status of regulatory environment.

Analysis of existing Who are they (private, public, local, int)? What are
competition and project your company/project’s competitive advantages
competitiveness over other market players? – especially important
for investors.

Estimated demand for Is there a feasibility study, a development plan?

your product or services Who are the off-takers, is there a PPA agreement
(volumes)?

3. Technology, business model and growth strategy

Business model:
Management Please describe the team that will manage the project
Team development and implementation, their previous
background, experience and role in the project. How many
men and how many women are among the owners,
management, board and staff of the project/business?
Technology and Describe the technology used in the project, its advantages
operations to other similar ones. PFAN project reviewers are
overview experienced financing practitioners in the clean energy
space and have practical experience with most common
clean technologies. Only completely new technologies or
enhancement of existing technologies will require a more
detailed technical presentation.
Also mention any milestones already achieved and progress
on implementation, or estimated implementation start and
target timeframe.

Marketing, How will the company sell its products/services to

distribution and customers, how they will be distributed, how payments will
sales to customers be received/processed.

Required supply What inputs are needed? Materials, raw materials, fuel
chain sources, equipment/technology. Have main suppliers been
identified/contracted? What is the relationship with
strategic suppliers? What are the risks, logistics involved?

Enabling Please describe the legal and regulatory environment

Environment applicable to the project (concession laws, privatisation,
mandated energy mix requirements or targets, structure of
energy tariffs/independent power production etc. planning
and building permission, commercial & business licences,
employment licences, emissions/water rights, import and
export permits, etc.)
What is the level of political support for the project at
state, regional and/or local level? How is this support
demonstrated? Might state guarantees be available? Are
 other incentives available (grants, subsidies, tax breaks
etc.)?

Human resources From construction to operations, are the required

professionals available, is training required?

Growth strategy:
Where is the Development Phase: this covers the time up until financial
project now and close and should outline what needs to be done and detail
how will it grow? the plans for achieving financial close;

Construction/Implementation Phase: this covers pre-

operations and activities / conditions that need to be in
place before the project is operational;

Start of Business/Operations Planning: the operational plan

should include details on day to day business operations,
scheduling, manpower distributions and supply chain
planning;

Expansion/Growth Strategy: to the extent that rapid

business growth and expansion are anticipated, information
on growth strategy and expansion plans should be provided,
and financial analysis provided later in this Business Plan
should reflect these details; What is the planned project
lifetime? What will happen at the end of this lifetime?

Exit Strategy: if and where applicable; this is always of

interest to evaluators and potential investors.
 Key performance So that success can be monitored
indicators (KPI)

4. Financial overview and investment proposal

Financial overview
Existing financial Equity Shareholder structure (local, int.,
structure companies/private individuals).
(disbursed/invested)

Grants Supporting organisations

Debt Investors already involved (local, int., type

of lenders, general terms)

Future financing Equity Expected additional investment from

already committed to existing shareholders?
the project

Grants Supporting organisations , amount

Debt Source of financing (any local banks?),

amounts and terms (tenor, borrowing
costs, any guarantees or collateral already
committed)

Developers “Skin in the Mention if developers have also put

game” significant “sweat equity”, non-cash
 contributions into the project. – most
investors would like to understand
developer’s commitment and link to the
project.

Overview of projected Discuss main assumptions, especially

cash flow (in USD) revenue and estimated capital
expenditures and operating expenses
(scope of work/bill of quantities/technical
specification), time frame used.

Expected financial Internal rate of return (IRR), return on

indicators capital invested/expenditure (ROCE)

Payback period, point of break even

Annual debt service coverage ratio (DSCR)

and interest coverage ratio (ICR) using
earnings before interest, taxes,
depreciation and amortisation (EBITDA)

Investment proposal:
The Investment proposal should be for a commercial investment which provides a
return on capital to the investor and/or which pays a rate of interest to a lender on
a debt, which is repayable on agreed terms. The proposal may include grant or
subsidised components, but the investment opportunity should be structured as a
commercial proposition. PFAN will not consider proposals that are structured
primarily as grant requests.
 Break down of total amount being asked in the different types of investment
envisaged (debt, equity, grants) and currency preference.
What is the target debt to equity ratio after proposed investment?
What rights and benefits would be attached to investors’ obligations and
commitments?

Detailed plan for the use of proceeds (source and application of funds
statement/summary), including CAPEX, OPEX, financing costs, soft costs

Indicate target type of investors, such as philanthropic investors, impact investors,

development funds, institutional investors, private equity, venture capital,
strategic investors, industrial investors, carbon investors, development finance
institutions and banks, and so on.

For equity investors, what would be potential exit strategies, including multiple exit
points if possible (such as industry sale, buy back by developer, IPO, etc)
For debt investors, what would be the pay back strategy, long term amortisation
based on stable cash flow generation or refinancing.

5. Identification and mitigation of risks

Risk Identify the nature of the risk, the likelihood of it occurring,
Assessment and the potential impact and possible mitigation measures. Also,
Risk Mitigators such as risks related to the underperformance of new
technologies. In case of new technologies, has intellectual
property been protected? What are the prospects for new
technology developments that may harm or benefit the
business model of the project? What laws and policies are in
place that could threaten the success of the project?
 Scenario The estimated financial impact of key risks, as demonstrated
Analysis in the cash flow projections under different assumptions of
growth, sales, successful implementation, milestones.
Under what circumstances would the project become
financially unviable? How likely are these circumstances to
occur? What are the implications and commercial options if
they do occur?

6. Social, environmental and gender impact

Social Including population trends/demographics, employment, land
ownership, customer behaviour (related to your
product/services), education, pollution abatement, health,
economic participation, water quality and availability, poverty
reduction etc.

How many people will increase their resilience to the impacts

of climate change due to your project? Jobs created, skills
transferred, technologies transferred, economic benefits from
increased productive use of clean energy solutions, etc.

Environmental Positive and negative impacts (including mitigation measures),

include outcome of environmental impact assessment (EIA), if
available. If possible, provide annual GHG reduction potential
for the project in tonnes of CO2e avoided or annual energy
savings in GWh, as well as methodology used and assumptions
for your calculation.

What are the energy efficiency gains offered by the new

technology/process/project?
 Gender How could access to your product improve the livelihoods of
women and girls or change observed gender inequalities?
Please provide a GIA (Gender Impact Assessment) if available.

7. Conclusion
Finally, in your conclusion, highlight the main strengths and benefits of
the project/business and summarise why an investor should consider
investing.