Discount rate: 8%
ESTIMATED8%
Standard CDB/IDB project evaluation discount rate for Caribbean agricultural investments. Reflects BBD:USD peg stability (fixed since 1975), sovereign risk premium, and opportunity cost of capital in the region.
CDB Annual Report 2024 uses 8-10% for agricultural project evaluation. IDB practice for Barbados projects. Conservative relative to project IRR (18.5% pilot, 22.3% full scale).
Feasibility report Section 6.2-6.3, lines 526-540. NPV computed over 10-year horizon at 8% nominal discount rate.
Yield realization: 70% conservative
ESTIMATED70%
Standard agricultural project assumption: first-year and conservative scenarios assume 70% of benchmark yield. Accounts for establishment losses, learning curve, sub-optimal conditions.
Year 1 at 75% of steady-state (establishment year), Year 2+ conservative at 70% of full published yield. Moderate scenario at 85%. Optimistic at 100%.
Feasibility report Section 6.1, lines 497-510. Revenue estimates presented at 70%, 85%, and 100% realization levels.
Yield realization: 85% moderate
ESTIMATED85%
Moderate scenario yield realization. Assumes competent management with minor weather/pest setbacks. Applied from Year 3 onward in P&L projections.
Year 3 revenue at 85% realization: $3,222,000 for 200 ha pilot. Year 5 assumed optimistic (full yield) as tree crops mature.
Feasibility report Section 6.2, lines 514-525.
CAPEX amortization: 10 years
ESTIMATED10 years
Standard agricultural infrastructure amortization period. Equipment lifespan 8-15 years, infrastructure 15-20 years, irrigation 10-15 years. 10 years is conservative weighted average.
$3,634,000 / 10 = $363,400/year for pilot. Applied as straight-line amortization in P&L.
Feasibility report Section 6.2, lines 519. Standard CDB/IDB practice for agricultural project evaluation.
10-Year IRR: 18.5% (pilot)
ESTIMATED18.5%
Computed from 10-year cash flow model: Year 0 CAPEX -$3.63M, Years 1-10 net cash flows as per P&L table. Breakeven mid-Year 4.
Cross-checked: 10-year NPV at 8% = $2.8M. Positive NPV confirms IRR > 8%. IRR of 18.5% confirmed via standard IRR formula.
Feasibility report Section 6.2, lines 525-527.
10-Year IRR: 22.3% (full scale)
ESTIMATED22.3%
Computed from 10-year cash flow model at 1,500 ha. Economies of scale reduce per-ha CAPEX by 21.6% and per-ha OPEX by ~0.6%.
10-year NPV at 8% = $18.5M. Higher IRR vs. pilot due to infrastructure sharing, bulk purchasing, mechanization efficiency.
Feasibility report Section 6.3, lines 529-540.
Pilot CAPEX ask: $1.1M
ESTIMATED$1.1M
Executive Brief Screen 4: Year 1 funding request. Subset of total $3.63M CAPEX — covers immediate needs for 200 ha establishment (land clearing, initial equipment, first-phase irrigation).
Represents ~30% of total CAPEX, covering Phase 1 setup (months 1-6). Remainder phased across Year 1-2 as revenue begins.
Executive Brief Screen 4, line 698. Structured as CDB concessional lending (70%) + grant (30%).
Brief NPV: +$5.2M (10yr, 8%)
ESTIMATED+$5.2M
Executive Brief financial callout. Uses moderate-to-optimistic revenue trajectory across 10-year window at 8% discount. Slightly higher than conservative-only $2.8M NPV because brief includes moderate/optimistic year 3+ ramp.
Conservative-only NPV = $2.8M (feasibility Section 6.2). Brief NPV = $5.2M uses moderate yield realization from Year 3. Range $2.8-5.2M depending on yield assumptions.
Executive Brief Screen 3, line 589. Includes revenue escalation from tree crop maturation in years 4-10.
Brief IRR: 14.2%
ESTIMATED14.2%
Executive Brief financial callout. Blended IRR using conservative Year 1-2 and moderate Year 3+ assumptions with explicit BADMC lease costs included.
Lower than feasibility 18.5% because brief model explicitly includes ongoing lease payments and slightly more conservative revenue ramp. Range: 14-18.5% depending on assumptions.
Executive Brief Screen 3, line 593.
Import substitution: $18.7M/yr at full scale
ESTIMATED$18.7M/yr
Computed: domestic food production at full scale ~$13.9M, with transport/retail markup equivalent = ~$18.7M import substitution. 4.7% of $400M food import bill.
22-35% of fresh produce imports specifically. With agro-processing (1.5-2.5x multiplier): $40-60M/year, addressing 10-15% of total food import bill.
Feasibility report Section 6.5, lines 553-569.
Currency conversion: BBD:USD 2:1
GOVERNMENTFixed 2:1
Central Bank of Barbados. Barbados Dollar pegged to USD at 2:1 since 1975. No devaluation in 50+ years. All BBD figures in the report converted at this fixed rate.
https://www.centralbank.org.bb/Eliminates foreign exchange risk for USD-denominated cost/revenue calculations. Noted in feasibility report risk matrix: 'Foreign exchange risk: Low — BBD pegged to USD at 2:1 (stable since 1975).'
Feasibility report Section 8, line 695. Also noted in final paragraph, line 801.
Operating cost inflation
ESTIMATED~2% per year
Implied in P&L table: Year 1 OPEX $2.482M, Year 3 $2.53M (+1.9%), Year 5 $2.60M (+4.8% cumulative from Year 1). Conservative inflation assumption for Caribbean context.
Barbados inflation averaged 3-5% 2022-2024 (post-COVID/energy spike). 2% annual OPEX growth is conservative.
Feasibility report Section 6.2, lines 514-521.