Good investment plan from financiers' point of view

Dr.sc.ing. Ilze PuriņaChairperson of the Board

Latvian Environmental Investment Fund

What convinces financier

You have to show:

• that you understand specifics of the market where you operate – factors that influence your company's income and costs

• that you know what you own and how to manage it:– how your company and technical system works from technical and financial point

of view– which are the main risks in it and how you manage them

• realistic assessments – cost and income side, risks and mitigation of them

• that you know what and why do you want to do

Good business plan

• Development vision

• Balanced cost side and income side

• Justified technical solutions

• Implementation and further management capacity

Development vision

• Vision – not from today's perspective but from long term perspective

• Don't make business plan for financing source – to get money, but for your needs!

• Question to be asked – do we really need to implement this project:– it is not ad-hoc idea but part of long-term strategy– it is not done only to take financial resources available

• Always find cooperation partners – customers and municipality

Balanced costs and income side

• Income side – be a bit more pessimistic than you think – will be more, will be better!

• Costs side – be a bit more sceptic – will be less, will be better!

• Critical risk aspects in your assessments:– number of clients – today and in future – average consumption m3 per client – losses

Technical solutions

• Realistic in assessment of capacities need – again not from today's but from tomorrow's point of view

• Investment costs and operational costs

Implementation and further management capacity

• Project implementation capacity – investor should be sure that you will be able to plan and supervise implementation of the project – from financial and technical point of view – good if your staff has done something similar before!

• Further management capacity of new equipment installed:– investments should bring expected benefits – improved quality of drinking

water etc.– you should have:

• professional staff • good monitoring system – beginning for new projects

Key question

Would you give money

– if it would be your money –

for investment in this project