1. Financial AnalFinancial Analysis forysis for
DevelopmentDevelopment ProjectProject by ARIFIN ABDUL LATIFARIFIN
ABDUL LATIF Founder & Senior Consultant/Economist ArifinLatif
ConsultingArifinLatif Consulting THIRD COUNTRY TRAININGTHIRD
COUNTRY TRAINING PROGRAMMES (TCTP) 2014PROGRAMMES (TCTP) 2014
[(TCTP) JICA/MOFA/INTAN][(TCTP) JICA/MOFA/INTAN] COURSE ONCOURSE ON
DEVELOPMENTDEVELOPMENT PLANNINGPLANNING ANDAND PROJECTPROJECT
MANAGMANAGEMENT FOREMENT FOR CAMBODCAMBODIAIA AND LAOSAND LAOS 9-20
June 20149-20 June 2014 INTAN Kiara, Kuala Lumpur, MalaysiaINTAN
Kiara, Kuala Lumpur, Malaysia
2. Part 1:Part 1: Development viaDevelopment via
Transformation?Transformation?An IntroAn Intro the case for
Kampuchea (Cambodia) ~ some current projects and challenging issues
in developmentthe case for Kampuchea (Cambodia) ~ some current
projects and challenging issues in development
3. q CAMBODIA: A country's comeback - actively seeking
investments from SMEs - the next big ASEAN growth story? Are there
any difference in Laos?
4. The Stars Cover Story: Cambodia calling - undergoing a quiet
transformation?
5. q From killing fields to economic transformation Are there
any difference in Laos?
6. Part 2:Part 2: Transformation - Some
definitions,Transformation - Some definitions,
directions...?directions...? q Transformation towards what end?
Transforming Traditional/ Agrarian Societies e.g. Cambodia - From
killing fields to economic transformation. Transformation to
Transition Economies e.g. Turkmenistan From USSR republic to CIS
nation. Transformation to NICs ~ Tigers/Lions? e.g. Malaysia/
Nigeria. Transformation to High Income Nation ~ 1Malaysia towards
Realising Vision 2020. Capacity building training in Ashgabad
(1998) & Lagos (2000). q Transformation is the fashionable,
buzzword today in national development process
7. q Transformation with political will/agenda Government
Transformation Program (GTP) Najibnomics Economic Transformation
Program (ETP) NKEAs; 10th Malaysia Plan; Economic Corridors (NCER,
ECER, Iskandar, SCORE) Budget 2013 & 2014 Najib: nobody is left
out!
8. Part 3: Biz Talk Live! (Bernama TV) ~Part 3: Biz Talk Live!
(Bernama TV) ~ ETP Is it on Track?ETP Is it on Track?
9. Live! interview invited at short notice, off-the-cuff
interactions with audiences on-the-air/ online (on twitter), etc.
Live! interview on BERNAMA TV (15 Dec 2012 @9.30pm 1 hour)
10. Part 4:Part 4: A Brief IntroA Brief Intro on Projectson
Projects ProjectsProjects are building blocks for growth. They need
to grow consistently and if sustained well enough then only well be
able to reap the success and achieve DEVELOPMENTDEVELOPMENT!
11. What are ProjectsWhat are Projects,, in the first place??
Timeline exist a beginning & an ending Collectively forms part
of a bigger subset in a program Building blocks of development
efforts Development projects should benefit the people Should be
feasible in the first place and meet criteria in selection in
relation to a host of developmental jargons
12. Feasibility Analyses of ProjectsFeasibility Analyses of
Projects Technical Analysis Market Analysis Social/Sociological
Analysis Environmental Impact Assessment (EIA) Political
Analysis
13. While ..... VIABILITY ANALYSIS includes FINANCIAL analysis
focus on the financial implication of the project ECONOMIC analysis
also impute its impact to the overall economy, include shadow
pricing of factors of production
14. PROJECTS should be ......PROJECTS should be ......
Technically feasible; Financially viable; Economically viable;
Socially (or culturally) acceptable; Environmentally sustainable
(or sound); and Politically desireable
15. FINANCIALFINANCIAL ANALYSIS forANALYSIS for
DEVELOPMENTDEVELOPMENT PROJECTPROJECT
16. Financial & EconomicFinancial & Economic Analysis
ofAnalysis of ProjectsProjects Capital InvestmentCapital Investment
AnalysisAnalysis Financial & Economic AnalysesFinancial &
Economic Analyses can be aided/speeded up by computer softwares,
e.g. COMFAR Expert III (UNIDO), WinDASI (FAO), and/or Spreadsheet
Applications (e.g. MS EXCEL) Project PresentationProject
Presentation & Reporting/ Documentation - for Project
Financing
17. Capital Investment Analysis:Capital Investment Analysis:
involves these concepts Time Value of MoneyTime Value of Money
Concept of Discounting & Compounding Financial & Economic
AnalysesFinancial & Economic Analyses Preparing Cash Flows
Decision Rule: Criteria for Viable Projects/Enterprise Sensitivity
Analysis
18. Capital Investment Analysis: The ProcessCapital Investment
Analysis: The Process INFO/DATA FINANCIALFINANCIAL ANALYSISANALYSIS
ECONOMICECONOMIC ANALYSISANALYSIS Cost-BenefitCost-Benefit ANALYSIS
(CBA)ANALYSIS (CBA) Break-even PointBreak-even Point ANALYSIS
(BEP)ANALYSIS (BEP) SENSITIVITYSENSITIVITY ANALYSISANALYSIS +
ASSUMPTIONS? + TECHNICAL FEASIBILITY? + MARKET ANALYSIS/STUDY?
Exports?? + SOURCES ? CASH OUTFLOWS 1 - Production; Capacity;
Inventories; 2 - Sales Volume; Sales Revenues A) Capital Investment
B) Production Costs - Variable & Direct Fixed Costs - Factory,
Operating & Transportation Costs C) Income Statement -
Operating Income; Sales; Profits (Losses); - Taxes; Dividends;
Retained Earnings CASH INFLOWS - Feasibility Reports, Company
Reports - Industry/World Markets, Internet, Reuters
19. PROJECTS arePROJECTS are viableviable iff.....iff..... Net
Present Value (NPV) is positive (NPV > 0); Internal Rate of
Return (IRR) exceeds the opportunity cost of capital (IRR > base
lending rate); Cost-Benefit Ratio (BCR) is greater than 1 (BCR >
1); and/or Quick Payback Period
20. Graphically, a viable project is... Net Present Value (NPV)
-200,000,000 -150,000,000 -100,000,000 -50,000,000 0 50,000,000
100,000,000 -4 -3 -2 -1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
18 19 20 Years of operation NPV(US$) Ammonia-Urea Plant Project in
Chardzhou, Turkmenistan NPV @12% = US$44.84 million IRR= 15.77%;
BCR= 1.26 Payback period 9.5 years
21. Part 5:Part 5: How to select a FINANCIALLY viableHow to
select a FINANCIALLY viable project? A Case Studyproject? A Case
Study Relating SWOT/PEST Analysis, project financing, scheduling,
market analyses/forecasting, etc. to ensure successful
implementation of project selections for development Using an
actual Case Study performed during my IDB Consulting Assignment way
back in 1998. A New Ammonia & Urea Plant in Charzew,
Turkmenistan i.e. related to oil & gas sector, energy,
fertilizer (urea) & agriculture in a CIS nation. From a former
Soviet Union republic has embraced free market dogma - and is now a
transition economy.
22. and was among the earliest Facebook member too! I was a
pioneeringI was a pioneering FaceBook addictFaceBook addict
23. CASE STUDY In a Developing/ Transition Economy New
Ammonia-Urea Plant Project (Turkmenistan) Location: Free Economic
Zone (FEZ), Chardzhou Financing: Project Financing
37. NH3-Urea Project: MNH3-Urea Project: Market
Analysis/Studarket Analysis/Studyy Way back in 1959-61, YB Aziz
Ishak* proposed the setting up aWay back in 1959-61, YB Aziz Ishak*
proposed the setting up a urea factory!urea factory! [* Malaysias
first Minister of Agriculture!] M$25mil considered too high then!?
Planned capacity 100 tons of urea/day and 60 tons of liquid
ammonia. Fertilizer Society Board to award contract to Friedrich
Uhde for M$26mil. It took Malaysia over 2-3 decades to finally have
our own urea fertilizerown urea fertilizer plantplant at very much
higher cost!.. and we were a vital agriculture-basedvital
agriculture-based economyeconomy!!
48. Postcript: Thanks for lending your ears ~ hope you have
learned some beneficial knowledge along the way use them to assist
your nations efforts in the development. All d best! Keep in touch.
Thank youThank you SpasiboSpasibo Terima kasihTerima kasih
49. I was among the earliest Malaysias LinkedIn member Im an
active nerd on LinkedIn..!!
50. My Professional & Online Referrrals My Professional
& Online Referrrals
51. My CV (top page) My Curriculum Vitae (top page)