Project Feasibility Studies in the Bioeconomy

The question often arises, “what is a project feasibility study or report, and why should one be done in bioeconomy-related matters”? A project feasibility study is an integral part of any due diligence process in any bio-related project. When a lender or investor considers putting money at risk, or when a company is considering an acquisition, new product line, or production site, they must consider all risks that may jeopardize the investment. When a project owner or developer is sourcing financing, especially for any type of new project or new technology, they should be prepared with such a report when presenting their request to available lenders, investors, or boards of directors. Understanding the exact bio market and the risks surrounding that market, as well as what might be done to mitigate those risks, is central to the success of any investment request and ultimately to the stability of the company.

Feasibility studies and reports are used to help determine the potential for success for a specific project including potential benefits, liabilities, risks, and opportunities.  Project feasibility can encompass areas like technical operations, location, legal, and scheduling – all of which are important to every bioeconomy project.  A project feasibility study is useful to help the project team focus on a specific opportunity and analyze the business opportunity at a specific location.

Some of the basic information and questions that should be answered in a project feasibility study include:

• The key benefits and risks of the project.
• The critical “go/no go” parameters.
• Alternative approaches which should be considered.
• The project team’s required knowledge and experience.
• (For the first commercial implementation of new technology) – its readiness for commercial scale operations.
• The project site required utilities such as electric, gas, water, and sewer.
• The project site required transportation access such as roads and rail.
• Local, state, and federal regulatory permits required.
• Local community support of the project.

These only touch the surface of a full project feasibility report, but the takeaway is to remember that it is essential to conduct a thorough study when considering investing your own, your investors, or your shareholders’ money in any new project.  Both internal and external resources provide needed value.  While many investors have in-house resources to perform parts of the assessment, precious few have the technical, economic, and scientific resources, with relevant knowledge and experience, to conduct all the necessary parts of the assessment.  Independent third-party input provides an unbiased perspective and can help identify non-obvious issues where “the forest can’t be seen for the trees”.

Among its 150+ experts, Lee Enterprises Consulting has a wide range of services in bioenergy, biomaterials and chemicals, biotechnologies, and feedstocks.  We certainly have specialists to conduct project feasibility studies.  Our Finance & Due Diligence services also include due diligence, techno-economic analysis, business plans, market assessments, and studies, offtake assistance, financial modeling & packaging, federal and state grants, loans and loan guarantees, plant and equipment appraisals/valuations, feedstock evaluating, costing & sourcing, CAPEX & OPEX forecasting, strategic planning, competitor analysis, accounting and auditing, and asset management & disposal to name a few.

Take a look at our experts and the services we provide.  You will note that most of our experts are also available for ancillary engagements and advice, for specialty engagements like serving as expert witnesses in litigation matters.  A good overview of our group is found in this video.  Call us at 1+ (501) 833-8511 or email us for more information.