Appraisal and Due Diligence stage

Once an operation passes Concept Clearance and the Client has signed and returned the Mandate Letter/ Request Letter, the Operation Leader carries out the operation’s appraisal and due diligence, which is designed to:
  • define the Bank’s prospective involvement;
  • identify and elaborate upon key issues, including necessary information on the operation, the client, the financing plan, the market, and;
  • capture all major risk areas and ensure they are properly evaluated. 


To assist the Bank’s review of technical, financial, legal and other aspects of the Operation, the Operation Leader may utilize appropriate external consultancy services, following selection in accordance with the Bank’s relevant policies.The principal output of the Appraisal and Due Diligence Stage is the Final Review Document (FRD), which includes detailed information about:

  • operation objectives/ targets;
  • the client, sponsors, guarantors, and co-financiers, including an assessment of their creditworthiness;
  • analysis of the market;
  • terms, conditions, and covenants of the Operation;
  • implementation arrangements;
  • creditworthiness and financial returns;
  • economic development and regional cooperation impact;
  • presentation of the risks, risk mitigants, and security arrangements, and
  • other key strategic issues involving shareholder value, procurement, environmental issues, corporate governance issues, etc.


The FRD is presented to the Credit Committee for approval, accompanied by the signed Term Sheet, which includes the principal terms and conditions under which the Bank is prepared to provide financial support to the operation. A completed and signed Letter of Information (LOI), describing the financial condition of the client, its legal structure and principal directors as well as the nature of the requirements for financing should also be in the Bank’s possession at this stage.