|Title:||Regional Gas Transmission Improvement Project in the Central Asian Republics |
|Dates: ||October, 2005 - November, 2005|
|Partner: ||None |
The Asian Development Bank was considering a loan to Tajikistan for the rehabilitation of its existing gas distribution system.
A consultant report was prepared under 'RETA-6023: Regional Gas Transmission Improvement Project in the Central Asian Republics', which identified and analysed the impact of available options. The financial section of the report, however, needed strengthening.
In September 2005 the ADB appointed Corporate Solutions to complete the financial section of the report. The engagement involved the preparation of a complete set of financial reports and analysis of Tajik Gas (TG), the implementing agency, and the proposed project, in accordance with ADB guidelines for the 'Financial Governance and Management of Investment Projects Financed by the ADB'.
- Review and analysis of the historical financial performance of TG for the previous five years and preparation of financial projections for the 10 following years
Identification of specific sources of revenue from the project and definition of the major cost assumptions
Presentation of income statements, balance sheets and cash flows in ADB format
Carrying out in-depth financial analysis of the proposed project, including calculation of the financial internal rate of return (FIRR) and weighted average cost of capital, taking into account all the financial costs and benefits
Conducting relevant sensitivity analysis on the financial results
Preparing a financing plan for the project, including the share of other co-financers, and appropriate counterpart funds for local expenditures
Determination of the weighted average cost of capital
Determination of appropriate financial covenants to be proposed for TG
Evaluation of the existing financial management system and recommending measures for improving the system
Determining the requirements for institutional strengthening and capacity building of TG and its subsidiaries.