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Financial Theory and

Practice
PRESENTATION ON FINANCIAL EVALUATION OF A BIO-GAS POWER PLANT
PROJECT

Submission

PREPARED FOR
Mrs. Rafia Afrin
Lecturer, Institute of Business
Administration
University of Dhaka

Prepared by:
1. Towheed Elahi, Roll # 146, 46D
2. Md. Shakil Ahmad, Roll # 01, 51E
3. Md. Shofikul Islam, Roll # 05, 51E
4. Lina Binta Ataur Rahman, Roll # 11,
51E

Bangladesh facts
Economy
Exchange rate: $1 = BDT 78.86

Inflation: 6.2% (Oct 15)

Forex reserve fueled by export &


workers remittance

IMF comments on Bangladesh:

7.3%
6.5%

6.4%

6.3%
12-13

13-14

14-15

15-16(est)

Stable economy, strong financial


sector

6.3%
GDP growth

Textile/RMG largest industry

Power Sector
Access to Electricity: 74% (June 2015)

Electricity to all by 2020

11.9 GW

Fuel Used: Gas, Diesel, Hydro, Coal, FO

Installed capacity

Gas limited power gen diversification

Average generation cost


TK/kwh (2014)

27.9
17.1
2.4

Demand Forecast: 17GW 20; 34GW by


30

6.2

1.4

5.1

What we have done?

Visited and Collected all the relevant information

Identified the relevant cash flows of this project

Divided the cash flows into groups

Used Excel for Data Representation

Calculated NPV, IRR, Payback Period, Discounted Payback


Period and Profitability Index

Evaluated the project on the basis of this financial tools.

Project Profile

Project Name

: Dublar Char Bio-Gas Power Plant and Chiller

Location of the Project

Technical Support Provider : RDA (Rural Development Academy), Bogra.

Financier of the Project

: United Finance Limited.

Owner of the Project

: Local Community

Overall Management

: Local Community

Tax Implication

: Tax Exempted

: Dublar Char, Sariakandi, Bogra.

Major Assumptions
Raw Materials
Regarding the Manure
1 No. of Cattles
2

1000

Season Factor
Normal

3 Normal

100% Off-Season

60%

January

February

March

April

Normal

May

October

November

December

Off-Season

June

July

August

September

4 Manure Production Factor

8 Kg/Cattle

5 Cost of Manure

6 Waste Factor

5 tk/kg
20%

Major Assumptions
Gas and Electricity Production
Factors
Gas Generation Factor (Average)
Methane concentration factor
Methane to Electricity Generation
Factor

30

m^3/tonne/day

60%
6

Electricity in Distribution

80%

Electricity for the Chiller

20%

kwh/m^3

Major Assumptions

Revenues
Price of the Electricity

Capacity of the Chiller

Ratio of Slurry to Raw Materials

5.45 tk/kwh
100 Litre
60%

Price of the Slurry

5 tk/kg

Slurry Timing

1 months

Rent of the Chiller

2 tk/litre/day

Result of the Analysis


Evaluative Factors
Cost of Fund
NPV
IRR
Payback period
Discounted Payback Period
Profitability Index

Results
10%
1,046,609
15.21%
5.09 Years (Cutoff period 8 years)
7.23 Years (Cutoff period 10 years)
1.24

Evaluation
Here we see that each and every component of the financial
evaluation is giving a positive signal in taking this initiative. This
project is financially feasible.

Thanks for being with


us.