FEI Consulting was contracted to develop creditworthy assessments of eleven municipalities and water utilities in Turkey, as part of the World Bank funded project. The goal was to determine their financial ability to borrow funds from Iller Bankasi (ILBANK) and meet their liabilities in a complete and timely manner.
This assessment was to be made on the basis of budget performance of both revenues and expenditures, the debt profile and available cash resources looking at a time series of past five years. The assessment process started with a baseline analysis which had two main objectives: (i) assessing the potential borrowers’ activity for the last five years and determining the feasibility that existing and future debts would be repaid, and (ii) generating relevant data for the feasibility report that might be used in preparing the financial analysis estimations/projections. The baseline analyses of the past performance and the subsequent assessment of capacity to repay existing and proposed debts were derived from recent budgetary performance, economic analysis of the local economic and social indicators, and an analysis of actual revenues and expenditures.
Specifically, the FEI team developed a strategy and an approach to preparing an assessment of the capacity to repay potential loans on time and in full and a methodology to assess the institutional capacity of the borrowers to repay their loans. It also identified the economic and financial data needed to conduct a creditworthy assessment, worked with the client and the entities to collect the needed data and conduct the agreed upon assessments; and prepared the agreed upon creditworthy assessment reports for each entity.
The project was funded by the World Bank as part of the Sustainable Cities Project II.
The project was implemented in partnership with Merit Risk (Turkey).