The funding requirement includes the cash needed to reach stable production

GFT recommends treating preparation expenditure as sponsor risk unless an identified counterparty has explicitly agreed otherwise. That boundary includes feasibility work, site investigation, engineering, permitting support, financial modelling and legal preparation. Each package should produce a decision or an inspectable deliverable. Site investigation should inform the suitability decision; engineering should define a purchasable scope. Paying for a report should not count as resolving the underlying risk when its recommendations remain outstanding.

IFC's financing application guidance describes preliminary review followed by a possible request for detailed feasibility or business planning before appraisal. GFT's interpretation is that preparation and funding approval are separate steps. A sponsor should therefore establish how preparatory invoices will be paid without assuming later reimbursement. The financier's request for more information is evidence of a review process, not a commitment to fund the information or the eventual factory.[S01]

Preparation facilities can change who bears particular costs, but only within their actual access rules. The Green Climate Fund describes preparation funding for Accredited Entities and Project-specific Assessment Approach applicants through grants, repayable grants or equity. GFT does not infer that a textile sponsor can obtain such support directly or that any preparation grant is permanently non-repayable. A proposal should identify the eligible applicant, approved activity, reimbursement mechanism and repayment conditions before assigning this source to a cost.[S08]

The preparation ledger should distinguish money already paid, invoices incurred but unpaid, future contracted expenditure and future uncontracted expenditure. Add separate fields for the paying entity and any proposed reimbursement. Historical spending may establish sponsor exposure, but it cannot pay an upcoming deposit. Equally, an invoice awaiting payment must not disappear because the budget presentation groups all preparation work under a heading called completed development.

A useful control is to maintain a whole-project cost view and a remaining-cash view. The whole-project view retains verified historical costs and their original funding sources. The remaining-cash view begins at a stated cut-off and includes only later payments and receipts. Reconcile them with paid invoices and bank records. If refinancing reimburses earlier sponsor expenditure, show the refinancing receipt and the payment to the sponsor explicitly. Do not simultaneously count the historical expenditure as fresh equity available to buy equipment.

An illustrative preparation case assumes XAF 12 million already paid from sponsor funds and XAF 8 million still payable. Whole-project preparation cost is XAF 20 million; future cash needed is XAF 8 million before any other spending. An unapproved reimbursement application contributes nothing to available cash. These assumed amounts demonstrate a reconciliation only. Neither the cost of preparation nor the probability of reimbursement is estimated for an actual venture.

GFT recommends setting a preparation spending limit tied to the next decision. If a site fails a technical review, the spending authority should require a revised site decision before equipment deposits proceed. Work that preserves an option should be identifiable separately from work that commits the sponsor to construction. This gives the sponsor a controlled stopping point instead of allowing earlier expenditure to become the reason for accepting a weaker investment case.

The initial scope should fund the supporting systems needed to operate the selected processes safely. The IFC Performance Standards establish a framework for assessing and managing environmental and social risks. GFT's financing recommendation is to convert the resulting actions into costed work packages, responsibilities and payment dates. Recording a risk without funding the action required to manage it leaves the production budget incomplete.[S22]

Begin with the bounded production process. For a cut, make, trim and finishing scope, GFT proposes identifying the actual electricity loads, water uses, building services, worker facilities and waste streams before assigning utility or safeguard allowances. This is a proposed first-line boundary, not a declaration that a particular factory exists. Do not insert an integrated spinning or dyeing complex into the budget merely because the broader textile value chain contains those activities.

The textile EHS guidance calls for tailoring recommendations to project hazards and site conditions, using qualified professional judgement. It should be read with the General EHS Guidelines. GFT consequently proposes engineering review of power protection, water supply, drainage, ventilation, fire protection and any process-specific treatment before the capital request is fixed. No unit rate or technical design is inferred from the existence of the guidance.[S23]

For each supporting system, separate connection cost, installed equipment, testing, initial consumables and recurring operation. A water system that is purchased without funded testing remains an unresolved commissioning package. A fire system should not be budgeted solely as hardware while training and inspection are omitted. These are GFT completeness checks; the required specification and applicable approvals must come from the qualified technical and regulatory review.

Utility resilience should be evaluated as an explicit design choice. GFT recommends comparing the cash consequences of the selected supply arrangement with a defined interruption scenario, while retaining the engineering team's load and reliability assumptions. If backup equipment is selected, its fuel, maintenance, safe storage and operating responsibility belong in the relevant cash schedules. A resilience asset does not eliminate the need to fund its operation. The financing chapter receives those inputs; it does not design the system.

Wet processing requires a separate boundary decision. The textile EHS guidance addresses process-related environmental issues across textile manufacturing, including wastewater. GFT recommends identifying whether each proposed process is inside the first-line scope, outsourced or deferred. If an expansion changes water demand or treatment obligations, cost that change before approval. An earlier budget for a different process cannot establish that the expansion's environmental provisions are adequate.[S23]

The same boundary discipline should govern shared infrastructure. If an initial site investment supports later lines, identify the portion needed for the first line and the reason for any larger capacity. The sponsor may choose to pre-invest, but the financing plan should show that choice and its current cash cost. Avoid making the first line appear cheaper by allocating a necessary connection to an expansion that has no committed funding.

GFT recommends treating training and measurement as defined delivery packages. For training, specify the roles, time away from production, trainer responsibility, materials, supervised practice and evidence of competence. For data capture, specify meters or devices, installation, connectivity, licences where relevant, integration, record definitions and support. A statement that digital systems will improve performance is not a purchasable scope or evidence of an achieved saving.

Budget these activities against the production sequence. Operators need access to the equipment and the applicable work instructions; supervisors need records they can interpret; finance needs an agreed connection between production events, stock movement and cash. GFT recommends reserving time and money for that connection before declaring the line ready. Otherwise training can be marked delivered while the receiving team cannot demonstrate the intended task.

Cost classification should not obscure payment. Some expenditure may be treated as an asset and some as an expense under the applicable accounting policy. Either way, a supplier or employee must be paid. GFT recommends keeping cash uses independent from the accounting classification, with a reconciliation between them. Obtain accounting advice for capitalisation decisions and preserve the documented policy rather than choosing a treatment that makes a funding ratio appear stronger.

Green eligibility is a further judgement. The March 2025 Guidance on Green Loan Principles focuses on eligible projects rather than the identity of the borrower. GFT's interpretation is that a training package, meter or software system requires a specific eligibility rationale before it is allocated to green proceeds. Being useful to a sustainability programme does not by itself determine financing eligibility or accounting treatment.[S17]

The illustrative register in Exhibit 10 separates those judgements. It is a proposed evidence structure, not an eligibility assessment. Each row requires supporting documents in an actual transaction. The table deliberately makes no assertion that a particular cost qualifies for a lender, a tax treatment or a green instrument.

Support after installation needs a budget owner as well. GFT recommends specifying who replaces a failed device, restores a production record and maintains access when a licence or service expires. Separate initial configuration from recurring support and identify when each payment begins. A supplier demonstration should not be treated as the receiving team's acceptance test. The funded handover should include a record of what was delivered, what was tested, who accepted it and what remains outstanding. Benefits should enter a forecast only on a stated assumption, with a sensitivity that removes them if the system is late or ineffective.

The register is useful only if unresolved decisions remain visible. GFT recommends an owner and an evidence deadline for each review field. If an expected green allocation is rejected, the underlying operating requirement remains. The sponsor must assign another available source, revise the scope safely or defer the purchase. Removing the cost from the funding request without changing the operating plan creates an omission rather than a saving.