Document

Transcript Document

Financing Cleaner Production and Energy Efficiency Projects

Presentation of the Energy Efficiency Guide for Industry in Asia

Hello!

Participant introductions

 What type of organization do you work for?

  e.g., industry, government, other if from industry, which sector and what size  What are your job responsibilities and areas of expertise?

 e.g., management, accounting, finance, engineering, production, environmental  What is your investment perspective?

 e.g., developer of investment proposals, one who funds investment proposals © UNEP 3

9.00

10.30

12.30

14.00

16.30

Workshop overview

Lecture

 Waste and Cleaner Production  Cost identification and estimation

LUNCH BREAK Workshop exercise

 Risks of waste   Cost identification for waste Cost estimation for waste  Capital budgeting and project profitability  Project funding   Calculating cash flow and simple payback Calculating NPV  What the bank will consider © UNEP 4

WASTE AND CLEANER PRODUCTION

Waste and Cleaner Production

What is waste?

• • “ Anything that leaves the company not as product!

” • It costs money … and … it can be prevented!

Waste and Cleaner Production

Waste takes many forms

Air Emissions Materials, Energy, Water, Labour, Capital Solid Waste Waste Energy, Wastewater Products, By-Products © UNEP 7

Waste and Cleaner Production

Exercise 1 (10 min)

Write down the risks associated with waste from the perspective of: • • • Management of a company Government Investors © UNEP 8

Waste and Cleaner Production

The

“

Cost of Waste Iceberg

”

THE HIDDEN COST OF WASTE

Adapted from: Bierma, TJ., F.L. Waterstaraat, and J. Ostrosky. 1998. “ Chapter 13: Shared Savings and Environmental Management Accounting, ” from

The Green Bottom Line.

Waste and Cleaner Production

The costs of waste ink at Southwire Company

• • The average disposal cost of a drum of hazardous waste ink was estimated as $50 Upon closer inspection, the true cost was discovered to be $1300 per drum: • • • • • $819 $369 $50 $47 $16 lost raw materials (ink, thinner) corporate waste management activities disposal internal waste handling activities hazardous waste tax © UNEP 10

Waste and Cleaner Production

Dilute & disperse

Cleaner Production Pollution Prevention Sustainable Development Recycling Dispersion Pollution Control Complexity of Environmental Issue

1960 1980 1990

Waste and Cleaner Production

“End of Pipe” treatment

Cleaner Production Pollution Prevention Sustainable Development Recycling Dispersion Treatment Complexity of Environmental Issue

1960 1980 1990

Waste and Cleaner Production

Off site recycling

Cleaner Production Pollution Prevention Sustainable Development Recycling Dispersion Pollution Control Complexity of Environmental Issue

1960 1980 1990

Waste and Cleaner Production

Prevention

Cleaner Production Pollution Prevention Sustainable Development Recycling Dispersion Pollution Control Complexity of Environmental Issue

1960 1980 1990

Waste and Cleaner Production

CP definition

• • • • Integrated, preventative, continuous strategy Products, production processes or services Reduce risks to humans and environment

and

increase profits!

or waste minimization, pollution prevention, eco efficiency… 15

Waste and Cleaner Production

CP benefits: reduced risk!

Reduced costs & increased profits Reduced material use and waste Reduced liability risks Increased productivity Enhanced reputation

Waste and Cleaner Production

CP strategies

Prevention of waste generation:

Good housekeeping - Input substitution - Better process control - Equipment modification - Technology change - On-site recovery/reuse - Production of useful by-product - Product modification © UNEP 17

Waste and Cleaner Production

CP versus End of pipe

COST ENVIRONMENTAL PERFORMANCE

End of pipe Treatment

COST ENVIRONMENTAL PERFORMANCE

Cleaner Production

Waste and Cleaner Production

Cleaner Production and EMS

REPORT ACT CHECK PLAN CP DO

Waste and Cleaner Production

CP Methodology

Step 1

Get organized

Step 2

Analyze processes

Step 3

Identify CP options

Step 4

Carry out feasibility analysis

Step 5

Implement and measure results

Step 6

Integrate in business processes

At what steps do you need cost data?

COST IDENTIFICAITON AND ESTIMATION

Cost identification and estimation

Step 2: Analyse processes

• • • • Prepare process flow charts Collect baseline data and observations Material balance: determine true waste!

Assign costs to materials, energy and waste © UNEP 22

Cost identification and estimation

Case study: the PLC Company

• A mid-sized manufacturer of food packaging materials • Major manufacturing steps are Printing, Laminating, and Slitting • Waste management includes incineration and wastewater treatment • Cleaner Production has reduced volume of solid scrap and the annual cost of waste © UNEP 23

Cost identification and estimation

Materials flow chart at PLS Company

plastic film, aluminium film, adhesive

INVENTORY

plastic film, ink

PRINTING

solvent air emissions printed film solvent air emissions

LAMINATION

printed laminated film

SLITTING

Solid scrap Solid scrap Solid scrap Liquid waste ink to waste management to waste management © UNEP 24

Cost identification and estimation

Materials flow chart at PLS Company

fresh water fuel and fuel additive

INCINERATOR

ash air emissions Waste water treatment chemicals air emissions

WASTEWATER TREATMENT

sludge Cleaner water to a nearby stream liquid ink waste from printing step

OFF-SITE LANDFILL

Cost identification and estimation

Materials Balance

• Physical analogy to financial balance sheet • Compares all material inputs and outputs • Identifies sources of waste and data gaps • Provides basis for cost evaluation

INPUTS MANUFACTURING PROCESS PRODUCT NON-PRODUCT OUTPUT (WASTE)

Cost identification and estimation

Other tools

• Walk-through & interviews • Cost checklists (generic & sector/process specific) – see handout C2 • Activity Based Costing (ABC), costs are allocated from overhead accounts – To processes, products, or projects that actually generate costs – Based on activities with a direct relationship to cost generation • Check accounting records • External expertise for less tangible costs, e.g.

– Insurance sector— liability estimation – Marketing firms— value of company image – Environmental agencies — estimates of current and future regulatory compliance costs © UNEP 27

Cost identification and estimation

To quantify or not to quantify?

• How do you know if a relevant cost or savings is quantitatively significant before you go ahead and quantify it?

You don’t.

• Try to do at least a rough, first-cut estimate of all quantifiable costs — then decide whether or not refining the estimate is worth the effort.

Do a balancing act!

Cost identification and estimation

Exercise 2 (10 min) List costs of waste management at PLS Company

(There are three categories of costs: • The cost of manufacturing inputs • The cost of waste management • Less tangible costs) © UNEP 29

Cost identification and estimation

Costs of waste at the PLS Company

The total cost of waste due to the generation of solid scrap during print runs was estimated to be US$213,000 per year, including: • Cost of lost direct manufacturing inputs (e.g, plastic film, ink, energy, labour) • Cost of waste management (e.g., incinerator operation, wastewater treatment plant operation, final waste disposal) © UNEP 30

Cost identification and estimation

Problematic accounting practices?

Various costs at a facility might be...

– “Hidden” in the accounting records – Misallocated from overhead accounts – Classified as fixed when they are really variable, or semi-variable – Not found in the accounting records at all – (Can you think of others?) © UNEP 31

“Hidden” costs of lost raw materials

Manufacture of plastic rear panels for automobiles (as % of input materials)

Material loss per the accounting records 2% Actual material loss 52%

Adapted from: Rooney, Charles. “ Economics of Pollution Prevention: How Waste Reduction Pays.

”

Pollution Prevention Review.

Summer 1993.

“Hidden” costs of lost raw materials at the PLS company

• The PLS accounting records show: • The amount of raw materials used • The amount of final product shipped • But the records do not show: • The amount of solid scrap waste generated • The amount of any other lost raw materials © UNEP 33

Cost identification and estimation

Direct costs vs. indirect costs

Direct costs • can be easily traced to a unit of product (e.g., direct materials, direct labour) • assigned directly to the process, product, or project responsible for generating the cost Indirect costs • cannot be traced as easily to a unit of product (e.g., facility energy use, insurance, maintenance, waste treatment) • assigned to facility, division, or company overhead accounts (varies per company) • Often

‘hidden’

• Often include environmental costs!!! © UNEP 34

Indirect Environmental Management Costs “hidden” in an overhead account

Product Manufacturing Cost Statement Variable Costs Raw Materials Intermediates Additives Utilities Direct Labour Packaging Wastewater Treatment

Fixed Costs

Fixed Costs

Supervisor

Supervisor Fixed Labour

Fixed Labour Depreciation

Depreciation Divisional Overhead General Services & Administration Divisional Overhead

General Services & Administration

$2.27/lb.

$0.87/lb. $0.41/lb. $0.96/lb. $11.32/lb. $10.31/lb. $9.14/lb.

$0.04/kW-h $0.07/kW-h $27.40/hr $31.43/hr.

•

legal expenses $0.60/pkg. $0.57/pkg $0.01/gal.

•

environmentally Total Variable Cost Total Fixed Cost Total Manufacturing Cost Total Cost

• •

driven R&D $4,600 $57,800 permitting time and $13,662 environmental training

Source:

Green Ledgers: Case Studies in Corporate Environmental Accounting.

World Resources Institute. May 1995.

Survey of industry accountants in the US

Findings: – Environmental management costs (such as waste handling, treatment, and disposal) predominantly assigned to overhead accounts – Even energy and water costs (manufacturing inputs) are usually assigned to overhead accounts Source:

Environmental Capital Budgeting Survey

Cost identification and estimation

Exercise 3 (10 min) Calculate the aluminium and plastic film loss during the slitting step of the process:

• Amount in km / year • Costs in $ / year (Hint: virgin material input = finished product + waste scrap) © UNEP 37

Cost identification and estimation

Problematic accounting practices?

Various costs at a facility might be...

Cost identification and estimation

Cost allocation

Costs initially assigned to overhead accounts are usually allocated back to processes, products, or projects using an allocation basis such as – Quantity of raw materials used – Production volume – Machine hours – Labour hours – Floor space © UNEP 39

Cost identification and estimation

Cost allocation

Allocated from overhead • Solid scrap waste • Treatment and disposal costs

Printing How would you allocate?

Laminating Slitting On the basis of:

•

# of set-up runs?

•

raw materials use?

•

machine hours?

•

amount of scrap?

•

some other basis?

Cost identification and estimation

Problematic accounting practices?

Various costs at a facility might be...

Cost identification and estimation

Fixed vs. variable costs

• Fixed Costs - do not vary with production level or other factors • e.g., equipment depreciation, labour • Variable Costs - do (or can) vary with production level or other factors • e.g., raw materials use, energy use • A cost considered “fixed” at one firm may be considered “variable” at another firm Cleaner Production aims to reduce variable costs © UNEP 42

Cost identification and estimation

Fixed vs. variable costs

(cont.) • Incinerator operating costs at PLS include: • Fuel, fuel additive • Operating labour • Trucking ash to landfill • Equipment depreciation costs • PLS views these waste treatment costs as essentially fixed costs — do you agree?

Cost identification and estimation

Problematic accounting practices?

Various costs at a facility might be...

Cost identification and estimation

Costs missing from accounting records

• Future costs • Future variable costs, e.g., landfill fees • Future fixed costs, e.g., future depreciation costs of new waste treatment equipment • Less tangible costs • Lost profit from reduced production throughput • Managing impact of waste on reputation Remember: future fixed costs are not fixed yet!

Cleaner Production now can reduce the size & cost of treatment equipment that you may have to purchase in the future © UNEP 45

Cost identification and estimation

So where do we get out data from?

CEO Board Accounting & Finance Research & Development Production Sales & Marketing Legal Purchasing Materials Control Inventory Operations Quality Control Shipping Maintenance Engineering Environment, Health, & Safety

Checklist: Cleaner Production investment data sources © UNEP 46

Cleaner Production at PLS Company

PLS implemented two CP projects to reduce the cost of waste in the printing step • an on-site scrap recycling project to reduce waste from start-up runs • a quality control camera project to reduce waste from errors during full-job runs © UNEP 47

Scrap recycling project

• PLS decided to start using solid scrap material for print job start-up runs, rather than using virgin plastic film • This would reduce the use of raw materials and the rate of solid scrap generation • Since this project did not require any cash outlay, PLS was able to implement it right away © UNEP 48

Quality control (QC) camera project

• PLS decided to purchase and install a 3 - camera system to monitor quality control of the print jobs as they actually occur • Allows the operators to detect print errors earlier and halt the operations before too much solid scrap is generated • The quality control camera system costs US$105,000 to acquire and install © UNEP 49

CAPITAL BUDGETING AND PROJECT PROFITABILITY

Capital budgeting and project profitability

Step 4: Feasibility analysis

Today’s Focus

Technical Regulatory

Project Selection

Financial Organisational © UNEP 51

Capital budgeting and project profitability

Financial feasibility analysis

• • 1. Is the project profitable?

Initial investment costs – – – – Annual operating costs and savings The cost of operating inputs The cost of waste management Less tangible costs Revenues 2. Determine availability of internal investment funds for bigger projects 3. Obtain external financing for remaining projects – – Private sector Government sector © UNEP 52

Capital budgeting and project profitability

Capital budgeting

The process by which an organisation: • Decides which investment projects are needed & possible, with a special focus on projects that require significant up-front investment (i.e., capital) • Decides how to allocate available capital between different projects • Decides if additional capital is needed © UNEP 53

Capital budgeting and project profitability

Capital budgeting practices

• Capital budgeting practices vary widely from company to company – Larger companies tend to have more formal practices than smaller companies – Larger companies tend to make more and larger capital investments than smaller companies – Some industry sectors require more capital investment than others • Capital budgeting practices may also vary from country to country © UNEP 54

Capital budgeting and project profitability

Typical project types and purpose

• Maintenance – Maintain existing equipment and operations • Improvement – Modify existing equipment, processes, and management and information systems to improve efficiency, reduce costs, increase capacity, improve product quality, etc.

• Replacement – Replace outdated, worn-out, or damaged equipment or outdated/inefficient management and information systems © UNEP 55

Capital budgeting and project profitability

Typical project types and purpose

(cont) • Expansion – e.g., obtain and install new process lines, initiate new product lines • Safety – Make worker safety improvements • Environmental – e.g., reduce use of toxic materials, increase recycling, reduce waste generation, install waste treatment • Others ...

Capital budgeting and project profitability

Cash Flow concept

The Cash Flow Concept is a common management planning tool.

It distinguishes between: (a) costs: cash outflows (b) revenues/savings: cash inflows © UNEP 57

Capital budgeting and project profitability

Types of cash flow

One-time Annual Other

Outflow

Initial investment cost Operating costs & taxes Working capital

Inflow

Equipment salvage value Operating revenues & savings Working capital © UNEP 58

Capital budgeting and project profitability

Cash flow: costs and savings

• Initial investment costs – purchase of the camera system, delivery, installation, start-up • Annual operating costs (and savings) – Operating input — materials (plastic film, ink), energy, labour – Incineration — fuel, fuel additive, labour, ash to landfill – Wastewater treatment — chemicals, electricity, labour, sludge to landfill © UNEP 59

Capital budgeting and project profitability

Cash flow: working capital

Working Capital is: “the total value of goods and money necessary to maintain project operations” It includes items such as: – Raw materials inventory – Product inventory – Accounts payable/receivable – Cash-on-hand © UNEP 60

Capital budgeting and project profitability

Cash flow: salvage value

Salvage Value is the resale value of equipment or other materials at the end of the project © UNEP 61

Capital budgeting and project profitability

Timing of cash flow

Annual Revenues/Savings End of project: Salvage Value

Year 1 Year 2 Year 3 TIME

Time zero: Initial Investment

Capital budgeting and project profitability

Cash flow:

‘

incremental analysis

’ • For many CP projects, you will need to do an incremental analysis – compare the CP cash flows to the “business as usual” cash flows – only the cash flows that change when you improve the “business as usual” operations © UNEP 63

Capital budgeting and project profitability

Profitability indicators

Definition: “a single number that is calculated for characterisation of project profitability in a concise, understandable form.” Common examples are: • Simple Payback • Return on Investment (ROI) • Net Present Value (NPV) • Internal Rate of Return (IRR) © UNEP 64

Capital budgeting and project profitability

Simple payback

(payback period) • Definition: the number of years it will take for the project to recover the initial investments • Usually used a rule of thumb for selecting projects, e.g. payback must be < 3 years Simple Payback (in years)

Investment Cash Flow © UNEP 65

Capital budgeting and project profitability

Simple payback vs ROI

Simple Payback (in years) = Initial Investment Year 1 Cash Flow ROI (in %) = Year 1 Cash Flow Initial Investment

3 years 33% © UNEP 66

Capital budgeting and project profitability

Exercise 4 (10 min)

Question 1: Calculate annual cash flows (use the cash flow worksheet!) for the incinerator operation Question 2: Calculate simple payback © UNEP 67

Capital budgeting and project profitability

Net Present Value (NPV)

Question: If we were giving away money, would you rather have: (A) $10,000 today, or (B) $10,000 3 years from now Explain your answer...

Capital budgeting and project profitability

Inflation

Money loses purchasing power over time as product/service prices rise, so a dollar today can buy more than a dollar next year.

costs $1

now inflation 5%

costs $1.05

next year

69 © UNEP 69

Capital budgeting and project profitability

Return on investment

A dollar that you invest today will bring you more than a dollar next year — having the dollar now provides you with an investment opportunity

Investing $1 now Investment 10 % interest, or “ return on investment ” Gives you $1.10 a year from now

70 © UNEP 70

Capital budgeting and project profitability

PLS Company

’

s QC project

Initial Investment Cost Annual Operating Costs Business As Usual The QC Camera Project 0 $ 105,000 $ 2,933,204 $ 2,894,741 Annual Savings = US$38,463 (in US$)

71 © UNEP 71

Capital budgeting and project profitability

QUESTION Is the annual savings of $38,463 per year for 3 years a sufficient return on the initial investment of $ 105,000?

Capital budgeting and project profitability

Time Value of Money (TVM)

• Money now is worth more than money in the future because of: a) inflation b) investment opportunity • The exact “time value” of your money depends on the magnitude of the: a) rate of inflation and b) rate of return on investment © UNEP 73

Capital budgeting and project profitability

Comparing cash flows from different years

• Before you can compare cash flows from different years, you need to convert them all to their equivalent values in a single year • It is easiest to convert all project cash flows to their “present value” now, at the very beginning of the project © UNEP 74

Capital budgeting and project profitability

Converting PLS cash flows to

“

present value

”

Annual Savings End of project = ??

= ??

$38,463 $38,463 $38,463

Year 1 Year 2 Year 3 TIME

Time zero: Initial Investment = $105,000

Capital budgeting and project profitability

Converting PLS cash flows to

“

present value

” Discount rate: • Converts future year cash flows to their present value • Incorporates: – Desired return on investment – Inflation • Reverse of an interest rate calculation 76 © UNEP 76

Capital budgeting and project profitability

Discount rate vs interest rate

Invested at an interest rate of 20%, how much will $10,000 now be worth after 3 years?

$10,000 x 1.20 x 1.20 x 1.20 = $17,280 At a discount rate of 20%, how much do I need to invest if I want to have $17,280 in 3 years?

Capital budgeting and project profitability

Which discount rate?

• Equal to the required rate of return for the project investment, which usually incorporate: – A basic return - pure compensation for deferring consumption – Any ‘risk premium’ for that project’s risk – Any expected fall in the value of money over time through inflation • At least cover the costs of raising the investment financing from investors or lenders (i.e. the company’s

“

cost of capital

”

) • A single “Weighted Average Cost of Capital” (WACC) characterises the sources and cost of capital to the company as a whole.

Capital budgeting and project profitability

Calculating

‘

present value

’

The value of the cash flow in year n

Present Value = Future Value n

(PV Factor)

The value of the cash flow at “ Time Zero, ” i.e., at project start-up Present Value (PV) Factors have been calculated for various values of d (discount rate) and n (number of years) and have been tabulated for easy use. (Also called discount factors)

79 © UNEP 79

Capital budgeting and project profitability

The value of a future $1, NOW

Discount rate (d)

Years into future (n) 1 2 3 4 5 10 20 30 10% 20% 30% 40%

.9091

.8333 .7692 .7142

.8264

.6944 .5917 .5102

.7513 .5787 .4552 .3644

.6830 .4823 .3501 .2603

.6209 .4019 .2693 .1859

.3855 .1615 .0725 .0346

.1486 .0261 .0053 .0012

.0573

.0042 .0004 .0000

Present value factors

Capital budgeting and project profitability

Net Present Value (NPV)

• Definition: the sum of the present values of all of a project’s cash flows, both negative (cash outflows) and positive (cash inflows) • NPV characterises the present value of the project to the company – If NPV > 0, the project is profitable – If NPV < 0, the project is not • More reliable than Simple Payback or ROI as it considers both the time value of money and all future year cash flows!

Capital budgeting and project profitability

Exercise 5 (5 min)

Year Expected Future Cash Flows * PV Factor = Present Value of Cash Flows (at time zero) 0 - $105,000 ???

- $???

1 2 + $38,463 + $38,463 ???

???

$???

3 + $38,463 ???

$???

Sum = the project ’ s Net Present Value = $???

82 © UNEP 82

Capital budgeting and project profitability

Answer 1

Year Expected Future Cash Flows * PV Factor = Present Value of Cash Flows (at time zero) 0 - $105,000 - $105,000 1 2 + $38,463 + $38,463 .8696

.7561

33,447 29,082 3 + $38,463 .6575

25,289 Sum = the project’s Net Present Value = -17,182

Capital budgeting and project profitability

Sensitivity analysis

• In business as usual scenario PLS Company needs waste water treatment plant in year 3: $150,000 investment • With QC project: $95,000 • Savings: $55,000 Also consider taxes!

– Pollution taxes / fees – Tax deductions for equipment depreciation – Tax deduction for “environmental projects” © UNEP 84

Capital budgeting and project profitability

Answer scenario 2

Year Expected Future Cash Flows * PV Factor = Present Value of Cash Flows (at time zero) 0 - $105,000 - $105,000 1 2 + $38,463 + $38,463 .8696

.7561

33,447 29,082 3 + $93,463 .6575

61,452 Sum = the project’s Net Present Value = +18,981

Capital budgeting and project profitability

Internal Rate of Return (IRR)

• Similar to NPV: considers both the time value of money and all future year cash flows • IRR = the discount rate for which NPV = 0, over the project lifetime (calculated in an iterative fashion) • Tells you exactly what “discount rate” makes the project just barely profitable 86 © UNEP 86

Capital budgeting and project profitability

Profitability indicator summary

Advantages Disadvantages Simple Payback & ROI NPV Easy to use Considers TVM Indicates project size Neglect TVM Neglect out-year costs Do not indicate project size Needs firm ’ s discount rate IRR Considers TVM Requires iteration Does not indicate project size

PROJECT FUNDING

Project funding

Options for project financing

• Internal funds • Private sector: 1. Commercial banks 2. Development corporations 3. Equipment vendors & subsidiary finance companies 4. Trade finance (suppliers and customers) 5. Equity • Government sector © UNEP 89

Project funding

Internal funds

Internal funds can be generated from: • Capital introduced by the owner • Profits & cash flows generated by the business and retained within it © UNEP 90

Project funding

Private sector financing

Private sector financing options include: • Long-term loans to purchase fixed assets: secured or unsecured • Short-term loans (including lines of credits without conditions on use) • Leasing • Equity (issue of shares/stock) © UNEP 91

Project funding

Capital from Government

Project funding

Barriers & solutions

• Problem: the project is not considered to be economically feasible • Solution: Total Cost Assessment of project • Problem: the firm is unable or unwilling to issue more shares or to raise debt • Solution: Leasing © UNEP 93

Project funding

Barriers & solutions

(cont.) • Problem: the firm does not yet have contacts with commercial banks • Solution: contact chamber of commerce and/local accountants for assistance.

• Problem: the firm is in public ownership and private sources of finance are not accessible • Solution: contact local national CP centre for institutional assistance © UNEP 94

Project funding

Exercise 6 (10 min)

• What information will banks and credit institutions ask for when evaluating PLS Company’s application for funding for the QC project?

Project funding

Exercise 6: answers

• Business or enterprise – Date established – Location, short history, structure – Names and biographies of owners • Key management – Age, experience and qualifications management – Organisation chart showing responsibilities • Market place – Position locally, main competitors, description of products / services – Level of technology © UNEP 96

Project funding

Exercise 6: answers

(cont.) • Financial position and performance – Current assets and liabilities – Latest financial accounts, figures on debtors, creditors and work in progress – Inventories, other loans, bank balance • Business plan – Objectives to be met with the borrowed funds – Expenditure budget and cash budget • Funds required – How much and when, in relation to business size – Margin for error and change in circumstances – Break-even for profitability and cash © UNEP 97

Project funding

Exercise 6: answers

• Structure of required finance – Short, medium, long term needs – Export finance requirements • Available collateral – Assets already pledged (collaterals) for other loans) – Assets available as collateral for this loan • Repayment issues – Starting date and overall plan – Repayment plan © UNEP 98