Why Bankability Matters
A project is bankable when a lender or investor will fund it on commercial terms, because its cash flow can repay them with a safe margin, its return beats the alternatives, and its land, contracts, permits and preparation hold up under scrutiny. Financing is the gate between a plan and a built project, so testing bankability early shows what a lender will find while it is still cheap to fix.
It decides whether money arrives
Lenders test cash-flow cover, returns, structure, contracts and legal title. A weakness in any one of them can stop financial close, however good the idea.
It protects your budget and time
Feasibility studies, designs and approvals cost money. A short check before you spend shows which gap to close first, instead of discovering it at the lender's desk.
It fits the project you have
A private factory and a public market need different things. Grants, VGF and PPP support are scored only where your project depends on them; commercial projects are not penalised for not needing them.
Why Tanzanian Projects Struggle to Reach Financial Close
TICGL/TERI research finds that many projects in Tanzania look viable on paper but fail at financing. The recurring causes are structural, not a lack of ideas or interested investors:
- The price that repays capital is not the price users can pay. In the TICGL/TERI local-authority markets case, the rent needed to repay commercial capital was about TZS 58,200 per m² a month, against a median stated affordability of about TZS 8,300.
- Expensive, short debt. Local-currency lending is costly against a government bond yield of about 10.8%, so cash flow must clear a high bar before it can service a loan.
- Thin capital stacks. Equity is often not committed in writing, and long-tenor funding that matches the life of the asset is scarce.
- Land, permits and contracts left late. Unregistered or contested rights, missing approvals and no contracted revenue stop lenders even when the numbers look acceptable.
- Preparation gaps. Studies without a reviewed financial model, and public support such as VGF or guarantees that is assumed but not secured.
The check below tests exactly these points, so you can see where your project stands before a lender does.
Read first: the research behind this scorecard
The tests in this tool come from TICGL/TERI's work on why Tanzanian projects fail to reach financial close and who pays when a project must repay its lenders.
Project Finance in Tanzania →Beyond Bankability: The Capital Stack →The Bankability–Affordability Dilemma →01 — Your ProjectEnter Your Project's Details
Use your best current numbers. If you do not know a figure yet, use a realistic estimate, because that gap in knowledge is itself something a lender will notice. All money figures are in TZS million. You can load an illustrative example first to see how the tool behaves.
Examples use illustrative figures shaped like the TICGL/TERI LGA market case; they are not real projects.
A · Project basics
B · Cost and funding (TZS million)
C · Operations (TZS million)
D · Demand, contracts, land and permits
E · Preparation, sponsor and risk
02 — Your ScoreYour Bankability Result
Score by Dimension
Cash Flow vs Debt Service
Red flags and strengths
The gap to bankable
Highest-impact moves
Each bar shows how many score points your result would gain if you made that one change, with everything else unchanged. Start at the top.
Score Gain From One Change
How Much Public Capital Moves the Score?
Priorities, in plain words
03 — How We ScoreThe Eight Dimensions, the Benchmarks and the Limits
The score combines a small cash-flow model with how complete and secure the project's foundations are. Weights reflect what typically stops Tanzanian projects at financial close: weak cash-flow margin and returns, an unsecured funding structure, unproven demand and affordability, missing land, permits or contracts, thin preparation, and unmanaged risk.
| Dimension | Weight | What is tested | Benchmark used |
|---|---|---|---|
| A · Cash-flow strength | 20 | Minimum DSCR and loan life cover over the loan tenor | DSCR 1.3x (lenders commonly 1.2–1.4x); below 1.0x cash flow cannot repay debt |
| B · Returns vs cost of capital | 10 | Project IRR against your hurdle and the government bond | Hurdle 16% (base); 15-year bond about 10.8% |
| C · Capital structure and funding | 12 | Debt share, tenor against asset life, equity secured, currency match | Debt about 70% or less of financed cost; tenor within about 60–80% of life; foreign-currency debt against shilling revenue penalised |
| D · Demand and affordability | 15 | Share of target users able to pay; strength of demand evidence | At least 70% able to pay (TICGL/TERI affordability screen) |
| E · Contracts and pricing | 10 | Customer contracts or pre-lets; approved pricing or tariff framework | Long-term contracts for most revenue; approved indexation |
| F · Land, permits and legal | 10 | Secured land rights; approvals and certificates | Clean, mortgageable title; main approvals in hand |
| G · Preparation and sponsor | 13 | Stage of studies; sponsor track record and capacity | Independent feasibility with a reviewed financial model |
| H · Risk, ESG and public support | 10 | Environmental and social work; status of any VGF, guarantee or concession | ESIA approved; signed support where the project needs it |
Rating bands
A minimum DSCR below 1.0x caps the score at 49. Any of these also caps the score at 69, so a project cannot be rated lender-ready with them present: project IRR below the government bond yield, fewer than half of target users able to pay, no secured land rights, or less than 30% of required equity secured.
Projects that need no grant, VGF or PPP support
If you choose "Not needed" for public support, dimension H is scored on environmental and social work alone, so a fully commercial project is not marked down for lacking VGF or a PPP agreement. A grant share of 0% is not penalised. If your buyers are corporate customers or a creditworthy offtaker, choose that option in Tab 1 and the 70% affordability test is switched off. Land, permits, contracts, cash-flow cover and returns are tested for every project.
The model in brief
Financed cost = Project cost × (1 − grant %)
Debt = Financed cost × debt % · Equity = Financed cost − Debt
// Debt service (level annuity over the tenor) and cover
Debt service = Debt × r ÷ (1 − (1 + r)−tenor)
Cash flow available for debt service (CFADS) = Revenue × (1 − operating-cost %)
DSCR = CFADS ÷ Debt service · LLCR = PV of CFADS over tenor ÷ Debt
// Funding gap to a 1.3x DSCR
Grant share needed = 1 − (1 − current grant %) × minimum DSCR ÷ 1.3
It is a first screen. It ignores tax, construction-period interest, inflation, working capital, taxes on distributions, phasing and detailed risk allocation, and it uses level debt repayments. Qualitative answers are self-reported. A bank or investor will apply its own criteria, and the TICGL/TERI research shows that the same project can look bankable on a lender's terms and unaffordable to its users. For that reason affordability is scored explicitly. Read the underlying research in The Bankability–Affordability Dilemma.
04 — Get It BankableFrom a Free Score to a Financeable Project
The scorecard shows where the gaps are. Closing them takes preparation work that lenders and investors will check: studies, a financial model, a funding structure, and evidence of demand and affordability. TICGL (Tanzania Investment and Consultant Group Ltd), with its research arm TERI, prepares projects for financing and has delivered feasibility studies for PPP projects including the Boko Dawasa bus terminal and the Msasani Fish Market redevelopment.
1 · Free screening
- This scorecard.
- Score, red flags, funding gap and ranked fixes.
- No cost, no obligation.
2 · Bankability gap review
- TICGL economists review your result and documents.
- Independent view of the gaps and what lenders will ask.
- A short written action plan.
3 · Project preparation
- Feasibility study across market, technical, financial and economic, legal, environmental and social, and risk.
- Financial model with DSCR, NPV, IRR and downside cases.
- Demand and willingness-to-pay research.
4 · Structuring and financing support
- Capital stack, VGF and PPP structuring.
- Lender and investor packs.
- Entry-mode, registration, TIC incentive and approvals support.
What usually moves a score the most
| Typical gap | What closing it involves |
|---|---|
| DSCR below 1.3x | Revisit pricing and volumes with evidence, cut cost or phase the build, extend tenor, lower the interest rate, and size debt to cash flow; if a funding gap remains, name its source (grant, VGF or equity). |
| Users cannot afford the price | Test willingness and ability to pay with a proper survey, tier the pricing, separate the public-good core from the commercial layer, and show a pass-through table. |
| Equity or land not secured | Obtain written equity commitments and registered land rights before approaching lenders. |
| No independent feasibility study | Commission a feasibility study with a reviewed financial model, which lenders and the PPP Centre expect. |
| Currency mismatch | Match the currency of debt to the currency of revenue, or add hedging and a reserve. |
| No contracts or approved tariffs | Secure pre-lets, offtake or approved pricing with indexation. |
Talk to TICGL/TERI
Send us your result, or book a conversation about preparing your project for financing.
✉️ economist@ticgl.comBook a consultation →What We Do →TICGL Markets →TERI Research →05 - Quick AnswersFrequently Asked Questions
What does bankable mean for a project in Tanzania?
A project is bankable when its expected cash flow can repay lenders with a safe margin, it earns a return above the cost of capital, its funding structure is secured, and its land, permits, contracts and preparation are strong enough for a lender or investor to commit. A profitable project is not automatically bankable.
Is the TICGL bankability scorecard free and private?
Yes. The scorecard is free. All calculations run in your browser and nothing is sent to TICGL unless you choose to e-mail your results.
What debt-service cover ratio do lenders expect?
Lenders commonly test a debt-service cover ratio (DSCR) of about 1.2 to 1.4 times. The scorecard uses 1.3 times as its reference. A minimum DSCR below 1.0 means cash flow cannot cover debt payments.
What score makes a project bankable?
A score of 75 or more with no critical red flags is rated lender-ready; 55 to 74 is conditionally bankable with gaps to close; 35 to 54 is not yet bankable; below 35 is at concept stage. Critical red flags cap the rating.
Why can a profitable project still fail the bankability test?
Profit is not the same as the ability to service debt on schedule. Lenders also test cash-flow margin, tenor, equity commitment, currency match, land title, permits, contracts and the quality of the feasibility study.
What if my project depends on charges that users may not be able to afford?
Enter the share of target users who can pay your proposed price. TICGL/TERI research on LGA markets and bus terminals shows that affordable charges often cover only a fraction of capital cost, and that the gap moves to users, taxpayers or investors rather than disappearing.
How can TICGL help improve my project's bankability?
After the free screening, TICGL offers paid services: a bankability gap review, feasibility studies and financial models, PPP and viability-gap structuring, and lender or investor packs.
Muhtasari kwa Kiswahili
Je, mradi wako unakopesheka (bankable)? Pima bure kwa dakika tano. Miradi mingi ya Tanzania ina wawekezaji wanaotaka kuingia lakini haifikii hatua ya kupata fedha. Sababu mara nyingi si wazo la mradi, bali kama hesabu, muundo wa ufadhili, ardhi, mikataba na maandalizi vinasimama mbele ya benki au mwekezaji. TICGL/TERI imetengeneza kipimo cha bure ambacho unaingiza taarifa za mradi wako na kupata alama ya 0 hadi 100.
Kinapima nini: vipengele nane: nguvu ya mtiririko wa fedha (DSCR), mapato dhidi ya gharama ya mtaji, muundo wa mtaji, mahitaji na uwezo wa watumiaji kulipa, mikataba na bei, ardhi na vibali, maandalizi na uzoefu wa mwendeshaji, na hatari, mazingira na msaada wa umma.
Vigezo: DSCR ya mara 1.3 (benki kwa kawaida hutaka mara 1.2 hadi 1.4), mapato ya asilimia 16 yanayotakiwa kwa mwekezaji dhidi ya hatifungani ya miaka 15 yenye takriban asilimia 10.8, na angalau asilimia 70 ya watumiaji walengwa waweze kulipa bei yako.
Utapata nini: alama, DSCR na IRR, pengo la ufadhili unalohitaji kuziba, alama nyekundu, na orodha ya hatua zenye athari kubwa zaidi. Ukiona DSCR iko chini ya mara 1.0, mradi hauwezi kulipa deni kutokana na mtiririko wake wa fedha.
Faragha na mipaka: hesabu zote hufanyika kwenye kivinjari chako na hakuna kinachotumwa kwa TICGL isipokuwa ukichagua kututumia matokeo kwa barua pepe. Hiki ni kipimo cha awali, si tathmini ya mkopo wala ushauri wa kifedha.
Hatua inayofuata: baada ya kipimo cha bure, TICGL/TERI hutoa huduma za kulipia: mapitio ya mapengo ya bankability, upembuzi yakinifu (feasibility) na modeli ya kifedha, kupanga muundo wa PPP na VGF, na kuandaa nyaraka kwa benki na wawekezaji.
Hitimisho: mradi wenye faida si lazima uwe unakopesheka. Kinachoamua ni uwezo wa kulipa deni kwa wakati, mtaji uliothibitishwa, na maandalizi yanayoweza kuthibitishwa. Wasiliana: economist@ticgl.com.
Chanzo: TICGL/TERI, Bankability–Affordability Dilemma (Oktoba 2026); vigezo vya DSCR na mapato vimetumika kama marejeo ya awali.