A buyer looking at a ten-year-old car consults an independent mechanic before signing anything. The engine, chassis, odometer, service history, and insurance and RTO records all get a thorough review, because a car’s real condition cannot be judged from its paint job or the seller’s word. A project loan running into hundreds of crores deserves at least the same scrutiny that a used hatchback gets, but unfortunately, often doesn’t receive it.

A promoter submits a detailed project report: revenue assumptions, capacity utilization figures, a repayment schedule, all internally consistent, all built to present the project in its best light. The lender’s credit risk monitoring team checks the arithmetic, the collateral, the promoter’s track record, and moves to sanction. There is a lack of an independent examination of whether the project itself can actually deliver what the numbers promise. This is the gap that a Techno-Economic Viability (TEV) report aims to plug.

What Does a TEV Study Cover?

A TEV report is a structured, independent Compliance Risk Assessment of a project across four dimensions.

1. Technical assessment:

Can the chosen technology and plant design deliver the stated capacity? Do the site, utilities, and infrastructure linkages support the project as planned? Is the construction timeline realistic, given the scope of work?

2. Market assessment:

How do demand and pricing assumptions compare against independent industry data? How is the competitive landscape?

3. Financial assessment:

Does the project cost estimate hold up line by line? Does the proposed mix of equity, debt and internal accruals genuinely add up? Can cash flow projections and debt-repayment capacity withstand adverse scenarios?

4. Management and promoter assessment:

Does the promoter have the execution capability this project needs? What does their track record on past projects show?

So, at what stage is a TEV required?

  • At sanction, before disbursement begins to confirm viability independently before lending starts
  • At key disbursement milestones (for long-gestation projects) to verify physical progress against each tranche released
  • At the first sign of trouble (a delay, a cost overrun, a missed repayment) to show whether the project is still worth backing or whether continued lending only compounds a loss already incurred

The Cost of Not Looking Closely

The scale of what goes unverified shows up clearly in India’s infrastructure data, published through MoSPI’s PAIMANA portal. As per its May 2026 Flash Report, infrastructure projects tracked by the government have absorbed close to ₹5.4 lakh crore in cost overruns against their original sanctioned value, an escalation of nearly 14.5%.

A second number matters just as much. Of the projects tracked, 41% have crossed 80% physical completion, but only 14% have crossed 80% financial completion. Construction is outpacing the money committed against it on a meaningful share of these projects, a gap that points to disbursement and Credit Risk monitoring practices not tightly linked to verified progress on the ground. In all these projects, a technical review that had flagged unrealistic construction schedules or underpriced inputs at the outset would have caught a share of this well before it became a lender’s problem.

Verified Progress, Verified Payout

The Reserve Bank of India released its Project Finance Directions, 2025, effective October 1, 2025, to meet this gap. In plain terms, the new rules require three things:

  • Lenders must confirm the project’s full funding plan and an agreed start date for commercial operations before disbursing a single rupee.
  • Funds must be released in tranches matched to actual construction milestones, not the borrower’s own status updates.
  • Every required government approval must be in hand before the loan is signed off.

When regulation expects tying of disbursement to genuine progress, meeting that expectation needs an independent, technically qualified voice confirming what stage a project has actually reached.

Separation of Viable Stress From Terminal Stress

When a project runs into trouble, a TEV tells a lender whether the underlying economics still work and a resolution plan is worth pursuing, or whether further exposure is only delaying an inevitable loss. Academic research on India’s non-performing asset cycles shows that restructuring committees lean on TEV studies once an account is under stress because they interrogate project feasibility on independent terms. That scrutiny delivers the most value earlier, at sanction. However, even after trouble has set in, it remains the clearest available signal, marking the difference between restructuring a project worth saving and quietly extending a loss.

Protecting the Lender’s Capacity to Keep Lending

Every project that goes bad on faulty assumptions ties up capital, provisioning headroom, and management bandwidth that could otherwise fund the next viable deal. A disciplined TEV process, applied consistently at sanction, at each disbursement milestone, and at the first sign of stress, keeps a portfolio’s bad-loan drag low enough that growth in the loan book does not come at the cost of its quality.

Where TEV Fits

Every project sponsor believes in the business they are building. That conviction often drives innovation and investment. Financing decisions, however, benefit from an independent credit risk assessment that is removed from the optimism naturally associated with a new venture. Rubix Data Sciences’ Techno-Economic Viability reports are built for this, to be applied at sanction and again at every milestone that follows, so that a lending decision rests on a project’s verified fundamentals. For lenders looking to build that discipline into their own process, such an independent check along with Early Warning Systems is the difference between financing a project and financing an assumption.