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The different stages/phases through which a project passes is called the project life cycle.
A. Opportunities studies
Identification of investment opportunities is the starting point in a series of investment related
activities
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An opportunity study should identify investment opportunities or project ideas by analyzing the
following factors in detail:
Natural resources with high potential for processing and manufacture:
The future demand for certain consumer goods or for newly developed goods:
Imports in order to identify areas for import substitution:
Cost and availability of production factors:
Possible expansion of existing industrial capacity to attain economies of scale
and
Export possibilities.
Environmental impact
General investment climate
The existing agricultural pattern that serves as a basis for agro based industry
Possible inter linkage with other industries
Opportunity studies can be general (sector approach) or specific (enterprise approach)
4. The project idea, is attractive enough for a particular investor or investor group;
5. The environmental situation is in line with national standards.
A pre-feasibility study should be viewed as an intermediate stage between a project
opportunity study and a detailed feasibility study.
C.Support (functional) studies
Support or functional studies cover specific aspects of an investment project, and are required as
prerequisites for, or in support of, prefeasibility and feasibility studies, particularly large-scale
investment proposals.
Examples of such studies are as follows:
Market studies
Raw material and factory supply studies,
Laboratory and pilot-plant tests,
Location studies,
Environmental impact assessment,
D.Feasibility studies
A feasibility study aims at providing all data necessary for an investment decision or against it.
Before the final decision is taken to commit resources, the technical, economical, and
commercial justification has to be provided in comprehensive and authentic terms.
These should be clarity about the location, the plant size, the material and the major inputs.
Components of feasibility study are;
1. project background and history
Name address of the promoter
Project background
Project objective
Outlines of the proposed basic project strategies
Project location
Economic and industrial policies supporting the project
2. Summary of market analysis and marketing concept
3 .raw materials and supplies and location, site, and env’t
4 Engineering and technology
5 Organization and mgt
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