2014-06-09 TCTP - Development Planning & Project Management for Cambodia & Laos (JICA, MOFA, INTAN). My input was as a seasoned lecturer/consultant in "Financial analysis for development project" ~ using real life first hand experiences during my 6-months stint as an IDB Project Expert in 'Project Financing' to Turkmenistan's State Bank for Foreign Economic Affairs (TFEB) at Ashgabat during the height of the 1998 Asian Financial Crisis -- using a case study: a new Ammonia/Urea Plant in Chardhow.

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 Intro…An 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 Star’s 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?
Ø Transforming Traditional/
Agrarian Societies 
e.g. Cambodia - From
killing fields to economic
transformation.
Ø Transformation to Transition
Economies  e.g.
Turkmenistan – From USSR
republic to CIS nation.
Ø Transformation to NICs ~
Tigers/Lions?  e.g.
Malaysia/ Nigeria.
Ø Transformation to High
Income Nation ~
1Malaysia  towards
Realising Vision 2020.
Ø
Ø
Ø
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
Ø Government Transformation
Program (GTP) 
Najibnomics
Ø Economic Transformation
Program (ETP)  NKEAs;
10th Malaysia Plan;
Economic Corridors
(NCER, ECER, Iskandar,
SCORE)
Ø Budget 2013 & 2014 
“Najib: nobody is left
out!”
Ø
Ø
Ø
Ø
Ø

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 we’ll
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…
Ø Using an actual Case Study
performed during my IDB
Consulting Assignment way back
in 1998.
Ø “A New Ammonia & Urea Plant in
Charzew, Turkmenistan” – i.e.
related to oil & gas sector,
energy, fertilizer (urea) &
agriculture – in a CIS nation.
Ø 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

24. New Ammonia-Urea Plant ProjectNew Ammonia-Urea Plant Project
(Chardzhou, Turkmenistan)(Chardzhou, Turkmenistan)

25. Checklist: ViableChecklist: Viable ProjectProject FinancingFinancing

26. Checklist: ViableChecklist: Viable ProjectProject FinancingFinancing

27. NH3-Urea Project:NH3-Urea Project: Financial AnalysisFinancial Analysis

28. NH3-Urea Project:NH3-Urea Project: Financial AnalysisFinancial Analysis

29. NH3-Urea Project:NH3-Urea Project: Information + DataInformation + Data

30. NH3-Urea Project:NH3-Urea Project: Information + DataInformation + Data

31. NH3-Urea ProjecNH3-Urea Project: SWOT Analysist: SWOT Analysis

32. NH3-Urea Project: MNH3-Urea Project: Market Analysis/Studarket Analysis/Studyy

33. NH3-Urea Project: MNH3-Urea Project: Market Analysis/Studarket Analysis/Studyy

34. NH3-Urea Project: Market Analysis/Study

35. NH3-Urea Project: MNH3-Urea Project: Market Analysis/Studarket Analysis/Studyy

36. NH3-Urea Project: MNH3-Urea Project: Market Analysis/Studarket Analysis/Studyy

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!
[* Malaysia’s first Minister
of Agriculture!]
Ø M$25mil considered too high then!?
Ø Planned capacity 100 tons of urea/day
and 60 tons of liquid ammonia.
Ø Fertilizer Society Board to award contract
to Friedrich Uhde for M$26mil.
Ø 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!!

38. NH3-Urea Project: MNH3-Urea Project: Market Analysis/Studarket Analysis/Studyy

39. NH3-Urea Project: MNH3-Urea Project: Market Analysis/Studarket Analysis/Studyy

40. Chardzhou plant Main ports
Export routesby railroads
Export routesby sea/ inland waterways
Export routesby highways/ roads
POTENTIALEXPORTROUTES

41. NH3-UreaNH3-Urea
Project:Project:
FinancialFinancial
AnalysisAnalysis

42. NH3-Urea Project:NH3-Urea Project:
Economic AnalysisEconomic Analysis

43. NH3-Urea: ProjectNH3-Urea: Project viability, CBA-FEZviability, CBA-FEZ

44. NH3-Urea: Project viNH3-Urea: Project viability, CBA-25% taability, CBA-25% taxx

45. NH3-Urea: ProjectNH3-Urea: Project viviability, CBA-tax freability, CBA-tax freee

46. NH3-Urea: Break-NH3-Urea: Break-even Point Analysiseven Point Analysis

47. NH3-Urea: SensitivitNH3-Urea: Sensitivityy Analysis (graphsAnalysis (graphs))

48. Postcript:
Thanks for lending
your ears ~ hope you
have learned some
beneficial knowledge
along the way… use
them to assist your
nation’s efforts in the
development. All d
best! Keep in touch.
Thank you…Thank you…
Spasibo…Spasibo…
Terima kasih…Terima kasih…

49. I was among the earliest Malaysia’s
LinkedIn member…
I’m an active nerd on LinkedIn……..!!

50. My Professional & Online Referrrals
My Professional & Online Referrrals

51. My CV (top
page)
My Curriculum Vitae (top page)