Techno-Economic Viability (TEV) studies: when one is required and what it must contain
For credit appraisal teams, and for promoters being asked for a TEV study as a condition of sanction.
Last reviewed 26 September 2026 · reviewed by Mr. Chintan Bavishi
The short answer
A Techno-Economic Viability study is an independent appraisal of whether a project is technically
capable of being built and operated as planned, and whether it services its debt on realistic
assumptions. Lenders commission one to test the promoter's projections before committing.
There is no single national rule that makes a TEV study compulsory at a given
deal size. Most TEV requirements come from the individual lender's credit policy. The one specific
regulatory trigger in the RBI Project Finance Directions, 2025 is narrower than it is usually quoted:
it applies where an infrastructure PPP project's DCCO is revised to reflect a change in the Appointed
Date, and the aggregate exposure of all lenders is Rs 100 crore or more.
Key facts
What a TEV study answers
Two questions, independently: can this project be built and run as designed (technical), and does it repay on defensible assumptions (economic/financial)?
Who usually requires it
The lender, as a condition precedent to sanction or disbursement, under its own credit policy. Requirements and thresholds differ between lenders.
The specific RBI trigger
Paragraph 20, RBI (Project Finance) Directions, 2025: a TEV study is required where the aggregate exposure of all lenders is Rs 100 crore or more, in the context of a DCCO revision reflecting a change in the Appointed Date for an infrastructure PPP project.
What that trigger is NOT
It is not a general rule that every project above Rs 100 crore needs a TEV study. The threshold is attached to that specific DCCO-revision circumstance. Lenders may require TEV studies well below it under their own policies.
Who may prepare one
Set by each lender through empanelment, not by statute. There is no central TEV register.
Distinct from
A valuation report (what an asset is worth) and an LIE stage certificate (whether construction has reached a claimed stage).
The two halves of the study, and why both matter
A TEV study that is strong on one half and thin on the other is the most common reason a
report gets sent back.
The technical appraisal
Whether the chosen technology and process route are proven at the proposed scale.
Whether the site, utilities, effluent handling, logistics and evacuation
arrangements actually support the design capacity.
Whether the capital cost estimate is complete - including contingency, interest during
construction and margin money for working capital, which are the items most often
understated.
Whether the implementation schedule is achievable, and what the critical path is.
The status of statutory clearances, and what is still outstanding.
The economic and financial appraisal
Demand and price assumptions tested against independent evidence, not just the
promoter's projections.
Capacity utilisation ramp-up assumptions, which are routinely optimistic.
DSCR, average and minimum, across the loan tenor.
IRR - project and equity - and NPV at a stated
discount rate.
Break-even, and a sensitivity analysis on the variables the project is
actually exposed to: input cost, realisation, utilisation, interest rate, exchange rate,
and schedule slippage.
The sensitivity analysis is the part credit teams read first. A single base case tells them
nothing about risk; what they need to know is which variable breaks the DSCR, and by how much
it has to move.
What separates a bankable TEV report from a rejected one
Reading published lender empanelment notices and rejection feedback, the same handful of
things come up repeatedly:
Named preparers. The report should name the individuals who prepared
it and their qualifications, not just the firm. Several lenders require this explicitly.
A disclosed site inspection. Who visited, on what date, and what was
observed. A desk-only study is a different, weaker document and should say so rather than
leave the question open.
Assumptions stated separately from conclusions, so a credit officer can
disagree with an assumption without discarding the analysis.
Independent evidence for demand and price - published data, comparable
installations, actual offtake documentation - rather than the promoter's own projections
restated in the appraiser's font.
An explicit view. A TEV study that lists facts and declines to
conclude has not done the job it was commissioned for.
Empanelment: how lenders decide who may prepare a TEV study
There is no central register of TEV consultants and no statutory qualification. Each lender
empanels, and publishes its own criteria when it invites applications.
Criteria vary, but empanelment notices commonly ask for: an engineering degree with a stated
minimum number of years of relevant experience for the individuals signing; a track record of
comparable studies in the same sector, often with references; in-house or tied-up financial
modelling capability; professional indemnity insurance; and a declaration of independence from
the borrower.
Sector matters as much as scale. Empanelment for process industry does not imply empanelment
for renewables or for hospitality. If you are a borrower, confirm the consultant is empanelled
with your lender, for your sector, before commissioning - a study from an
unempanelled consultant is often simply not accepted, whatever its quality.
TEV, LIE and valuation - three different documents
These get conflated constantly, and it causes real delay when the wrong one is commissioned.
TEV study - before sanction. Should we lend to this project at all?
Technical soundness plus financial viability.
Valuation report - what a specific asset is worth, on a defined basis,
as at a defined date. Signed by a registered valuer in the relevant asset class.
One project will often need all three, at different points, and sometimes from different
firms where the lender treats combining them as an independence problem.
Your lender's policy governs. Apart from the specific DCCO-revision trigger described
above, whether a TEV study is required, what it must cover and who may prepare it are decided by the
lender, not by regulation. Before commissioning anything, get the requirement in writing from the
credit team, including the format and the empanelment position. The regulatory references on this page
were checked on the date shown.
Common questions
Is a TEV study mandatory for every project above Rs 100 crore?
No. That is the most common misreading. The Rs 100 crore aggregate-exposure threshold in paragraph 20 of the RBI Project Finance Directions, 2025 attaches to a specific situation - an infrastructure PPP project whose DCCO is revised to reflect a change in the Appointed Date. Outside that, whether a TEV study is needed is a matter of the lender's own credit policy, and many lenders require one well below Rs 100 crore.
Who is qualified to prepare a TEV study?
There is no statutory qualification or central register. Lenders empanel TEV consultants against their own published criteria, which typically cover engineering qualifications and years of experience for the named preparers, sector track record, financial modelling capability, professional indemnity cover and independence from the borrower.
What is the difference between a TEV study and a project report?
A detailed project report is prepared by or for the promoter and presents the project. A TEV study is independent of the promoter and tests that presentation - it exists precisely to give the lender a view that is not the borrower's. A TEV study that simply restates the project report has not served its purpose.
How long does a TEV study take?
It depends on sector, project size, whether a site inspection is required and how complete the promoter's documentation is when the engagement starts. The single biggest variable is document readiness - studies stall waiting for clearances, offtake documentation and firm cost estimates far more often than for analysis time.
Can the TEV consultant also act as the Lender's Independent Engineer?
Some lenders permit it, others treat it as an independence concern because the LIE would then be monitoring a project against its own appraisal. It is a lender-policy question, so confirm the position before appointment.
Does a TEV study guarantee the loan will be sanctioned?
No. A TEV study is one input into a credit decision. It can be positive and the facility still declined on other grounds, and a study that honestly flags a weakness is doing its job even when that is not the outcome the promoter wanted.
Sources
Everything stated above is checkable. These are the documents it comes from - read them
yourself rather than relying on this summary for anything that carries consequences.
Your lender's TEV empanelment notice and credit policy The operative source for whether a study is required, what it must contain and who may sign it.
Reviewed by Mr. Chintan Bavishi · LinkedIn · 26 September 2026.
ValuationZone is not itself a registered valuer and does not sign reports; assignments are carried
out by a panel of 300+ independent registered valuers, Chartered Engineers and Chartered Accountants.
Scoping a TEV study
Tell us the sector, the project size and which lender is asking. We will tell you what that lender typically expects the study to cover and whether our panel is empanelled for that sector.