Feasibility Study For School Project
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FEASIBILITY STUDY FOR NEW PRIVATE SCHOOL PROJECT DEVELOPMENT IN ETHIOPIA FEASIBILITY
STUDY FOR NEW PRIVATE SCHOOL PROJECT DEVELOPMENT IN ETHIOPIA
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ABC ACADEMY
Pae 1
SCHOOL PROJECT FEASIBILITY STUDY
2023
PROPOSED LOCATION: ………… OROMIA REGION; SHEGER CITY ADMINISTRATION
OCTOBER, 2023ADDIS ABABA, ETHIOPIA
FEASIBILITY STUDY REPORTFOR
THE ESTABLISHMENT OF PRIVATE SCHOOL KG
GRADE
12
)
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ABC ACADEMY
Pae 2
SCHOOL PROJECT FEASIBILITY STUDY
2023
TABLE OF CONTENTS
I.
EXECUTIVE SUMMARY…………………………………
II.
PROJECT
BACKGROUND………………………………
.5
III.
MARKET ANALYSIS
………………………………
.10
IV.
TECHNICAL STUDY
……………………………………
25
V.
ORGANIZTION AND MANAGEMENT
…………
34
VI.
FINANCIAL FEASIBILITY ANALYSIS
…………3
VII.
ANNEXES
……………………………………………………4
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ABC ACADEMY
Pae 3
SCHOOL PROJECT FEASIBILITY STUDY
2023
I.
EXECUTIVE SUMMARY
Private schools have sprung up across the country in recent decades, particularly in Addis Ababa
and surrounding towns generally named Sheger City Administration to meet the ever-increasing d
emand forquality education from parents who are willing and able to pay. Since their inception in
the mid-1990s,
private schools have made tremendous strides in terms of attracting a large student population a
nd claiming to provide a higher-quality education. As a result, private owned schools have become
an important alternativeto the overcrowded and under-resourced public school system
By considering increasing importance of sustainable education facilities in the country and
in accordance tonew education policy (school curriculum), this project feasibility study document has
been conducted with anintention to establish well-organized private school. Hence, the envisaged
school project is going to be named
Fortune Academy
” which
is an Ethiopian owned educational service business founded by Mr. ABC PLC, whois energetic
business person and inspired to work on developing future generation. Furthermore, Mr. ABC isan
educated young entrepreneur having a skill of multi disciples and attained different academic levels
thatenables him to properly administer the underlying educational service business as legally to be
formed as aSole Proprietorship.To this end, the underlying school project is aimed to provide ever
best quality education services at all levelwith fair price and gives more attention to all community
inclusive to become a bench mark for the others.
The school will align its work with its mission, producing competent and ethically well shaped stu
dents. Thus, prioritized plan of project location is proposed to be in Koye-Feche Locality of SHEGER
City Administration. However, the firm will develop the envisaged school project within the vicinity
where available land has beenallocated by city land management for same purposes and to expand
its services investment activity in other sub-
cities and further it will establish more educational centers throughout the country in other regio
nal states. Hence, despite the fact that adequate market is available to absorb the intended
school services fromthe project, the promoter is confident enough that the project will not face
market difficulties.
Technically, the development of an envisaged school project has planned
to be equipped withmodern learning facilities and designed to fulfill every need of
students’ as
-well-as that of entire schoolcommunity. The intended engineering design is proposed to comprise
multiple technical features. As many asin Modern schooling system, precise and accurate human
resource development and management are crucial factors for the accomplishment of the
underlying schooling service infrastructures. Accordingly, the school
has planned to start service delivery operation of Primary School Education for Grade-1 to Grade-
6 duringacademic year of 2017 E.C. (2024/25 G.C.) with initial expected total 300 students at 70%
minimum capacityutilization.
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ABC ACADEMY
Pae 4
SCHOOL PROJECT FEASIBILITY STUDY
2023
Regarding project financing matters, the total investment cost of the project is estimated at ETB
135,306,066. From the total investment cost, about 25
% is assumed to be covered by promoters’ Equity
contribution and remaining 75% of investment cost is expected from external financer/Banks as
Project Funding Facility. On the other hand, although the project will generate negative net benefit
(Loss) of ETB10.28 Million and ETB 1.96 Million during 1
st
and 2
nd
years, there will be positive net benefit starting year-3 and throughout projected life span. Thus,
the net profit after tax of ETB 8.95 Ml; ETB 16.43
Ml; ETB 29.83 Ml; ETB 43.95 Ml; ETB 61.49 Ml; ETB 80.04 Ml; ETB 104.45 Ml; and ETB 132.30 Ml
;during its 3
rd
,4
th
;5
th
;6
th
;7
th
;8
th
;9
th
and 10
th
of operations respectively. Furthermore, the liquidityindicated from cash flow movements given in
the financial analysis part shows the project start by generating positive value of ETB 6.02
Ml; ETB 8.51 Ml; ETB 17.83 Ml; ETB 36.29 Ml; ETB 62.07 Ml; ETB 96.98 Ml; ETB 143.24
Ml; ETB 203.82 Ml; ETB 279.19 Ml; ETB 374.60 Ml; and ETB 492.76 Ml;during year-0, 1
st
,2
nd
,3
rd
,4
th
,5
th
,6
th
,7
th
,8
th
,9
th
and 10
th
Years respectively.While considering investment decision parameters, the project will have an
internal rate of return (IRR)=31% before tax and (IRR) = 25% after tax; whereas, the net present value
of the project over totalinvestment cost at 15.5% discount rate is found to be ETB 84,276,020. Hence,
all investment
decision parameters are attractive and acceptable with the implication that the pay-back period f
or initialinvestment will be fully recovered during the 4
th
year. Finally, the underlying school project found that it will have several socio-economic benefits
; such as: Increment of
Citizens’ Literacy level,
Employment generation for 64 permanent individuals at differentlevel and worth financing due to
its financial viability and social desirability. More important of all, the project feasibility study
conducted reveals that the overall viability of envisaged School project is going tobe profitable and
liquid throughout its operation years and contributes a lot to the development of
the sector even at worst situation. Therefore, supporting such valuable project from every concer
ned organlike, City Administrative offices, Financing Banks and others will be considered as wise
investmentdecisions from the entire corner.
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ABC ACADEMY
Pae 5
SCHOOL PROJECT FEASIBILITY STUDY
2023
II.
BACKGROUND INFORMATION
2.1
ESTABLISHMENT DATA
Proposed Title: ………………….…
ABC Academy (Primary School Project)
Proposed Location: …………….…
..Oromia Region; Sheger City Administration
Project Promoter: …………………
.ABC PLC
Service Composition: ………….…
..Educational Services Business(Pre-schools, Primary and Secondary School Services)
Special Facilities: ………………… Inclusive of Visually
Impaired and Disable Children
Project
Status: ……………………
...New Start-Up (Under Formation)
Legal Formation:
…………………
..Sole Proprietorship Firm
Investment Permit: …………………Under Process
Trade Registration
and License: ……
To be Processed
Estimated Project
Budget:…………
..ETB 135,306,066
2.2
PROJECT SUMMARY AND OWNERSHIP
The envisaged school project is an Ethiopian based educational sector service business under-
formationand to be legally established as a Sole Proprietorship firm business aimed to provide ever
best qualityeducation services at all level with fair price and gives more attention to all community
inclusive to become a bench mark for the others. The school will align its work with its mission,
producing competentand ethically well shaped students. By considering increasing importance of
sustainable educationfacilities in the country and in accordance to new education policy (school
curriculum), the promoter hasinspired and taken an initiative to play a role on the enhancing
economic activity of the country throughhaving own part on education sector development by
establishing well-organized private school.Thus,
the envisaged school project is going to be named “Fortune Academy” which
is privately ownedschool founded by Mr. ABC PLC, who is energetic business person and inspired to
work on developingfuture generation. Furthermore, Mr. ABC is an educated young entrepreneur
having a skill of multidisciples and attained different academic levels. On top of all, the founder
earned experiences in various business operations and other business development activities during
his previous business career not onlyin Ethiopia, rather ha has been experiencing on several business
operations abroad including teaching andschool administration that enables him to properly
administer the underlying educational service business
.
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ABC ACADEMY
Pae 6
SCHOOL PROJECT FEASIBILITY STUDY
2023
Regarding the target area, although prioritized plan of project location is proposed to be in Koye-
FecheLocality of SHEGER City Administration, the promoter is willing to develop the intended school
project
within convenient and strategic location and vicinity of the newly structured “Sheger City” where
available land has been allocated by city land management for same purposes. Hence, Fortune
Academy isa new business to be established within stated vicinity having strategic focus on
educational servicedelivery business
that fits in line with government efforts to establish as many pre-schools, primary schoolsand
secondary schools as possible so that many children get access to education. Quality of basic
education isvery important to even the poor children. People of Ethiopia constitute empowerment;
and believed thateducation is one of the tools that will generally empower the country in
different aspects of development.
Thus, the project has an intension to contribute on responding Regional demands of having a high
level ofeducation at all levels and being a nation which produces the quality and quantity of
educated peoplesufficiently equipped with the requisite knowledge to solve the society's
problems in order to meet thechallenges of development and attain competitiveness both regionally
and globally at affordable costs, andhence, the promoter has motivated to implement the underling
school project with initial capital projectedto be ETB 135,306,066
2.3
VISION, MISSION AND OBJECTIVES
2.3.1
Project Vision
The vision Fortune Academy with valued integrity and teamwork is to:
Create and enabling „Educational envir
onment whereby social and cultural integration of learningwill occur, strengthening them through
taking care, productive education and health resulting in
dignity and independence of individual students as well as community‟.
Build a highly competitive private school that will become the number one choice for both
parentsand students in Ethiopia in general and for Oromia Region in particular.
2.3.2
Mission Statements
The envisaged project mission is to provide professional and conducive learning environment to
students atdifferent level of learning. The overall business goal is to position its brand
become the leading private school brand in the educational cum private school industry in the regio
n, and also to be amongst the top 10Special need schools in Ethiopia within the first 5 years of
operations.
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ABC ACADEMY
Pae 7
SCHOOL PROJECT FEASIBILITY STUDY
2023
2.3.3
Project Objectives
2.3.3.1
General Objective
The general and primary objective of envisaged project is to develop the high-end school facilities
that inturn enable
the company‟s ease and productivity
through active participation in the sector developmentthrough improved quality and diversity of
instructional services to be offered to children in Grades 1-12 asa power to produce higher levels of
achievement across diverse segments of the population. A secondaryobjective is to ensure that
students who are disadvantaged by nature of their
family background, disabilitiesor geographic location are provided with the specialized instructional
programs and services that will allowthem to compete academically with their more advantaged
peers.
2.3.3.2
Specific Objectives
The more definite and specific objectives with having this feasibility study document includes:
To acquire total land area required about 20,000 M
2
for construction of technology supportedschool building that enables to provide standard
educational services.
To prepare conducive learning environment and playing fields for children at all school age,
To equip the school project as modern as class-rooms and administrative offices
to requiredstandards and employ dynamic school teachers able to act, think and act outside the box.
To impart special schooling services for students with special need among others through use
ofspecial education materials
To improve the mobility skills of the disabled children through uses of necessary aids andappliances
that give special inputs on managing the daily living skills.
To cope with the normal literacy levels to prepare and provide opportunities for
educationalintegration that would eventually lead to' social integration.
To prepare the students for integration in regular schools as far as possible and provide
supportservices for physically disabled children to get primary education.
To become a leader in the provision of quality educational services among similar institutions
and play significant role towards the education sector development
To generate revenue that covers total initial investment cost within three years and
ensure profitability in order to expand the operation and other development activities in the
country.
To make investment expansion on educational service provision to other regional states
of Ethiopiawith standard quality. So then, in the short run plan up to 5 years of operation, Fortune
Academywill open 3-additional branches at different regional cities.
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ABC ACADEMY
Pae 8
SCHOOL PROJECT FEASIBILITY STUDY
2023
2.4
SERVICES DESCRIPTION BY LEVEL
Pre-School (KG-1 to 3):
In this class, children are taught to develop their memory skills andcreativity through play. The
school will hire teachers who trained in this profession developed a goodwork ethic, which will help
the children to develop according to their interests.
First Cycle (Grade-1 to 6):
Assistant teachers are going to be assigned to each class to ensure
thatchildren receive care and supervision like they received in the kindergarten, hence, the school
help themgrow and develop greater independence and self-confidence during their stay in this
grades
Second Cycle (Grade-7 & 8):
At this grade level, students are encouraged to be more creative as wellas to prepare for a variety of
regional and national examinations. The school will prepare Students forhigh school level education
and assist them what they can do to succeed in the future choose theirfuture careers.
High School (Grade-9 to 12):
At this level, the school will prepare students to exceed in highereducation. The goal at
this stage is to create creative and community-oriented students with a world-classmind. Hence, the
are going to achieve one of the highest results in the nationwide university entrance exam
2.5
SCHOOLING STRATEGIES
In order to be positioned in line with the national education policy and new curriculum, the
followingstrategies will be undertaken during the implementation of envisaged School Project:
Initially, Fortune Academy will start Schooling Services at Primary Level from (Grade-1 to 6)
with proper infrastructure as phase-I pilot project
Offering Residential and Day scholarship Program for Children from lower income Family.
Train the Students in Systematic Education and Motivate parents for further supportive actions.
Train the Students in technology supported facilities and other allied activities.
Develop Teacher-guided instruction and enable to emphasis efficient teaching on basic educationin
the academic areas
Encourage students with a Regular homework assigned at all grade levels and Communicate Par
ents to evaluate Weekly summaries of each student's progress
Encourage personal practice by students which enables to take individual responsibility to learn,
Apply other sympathetic strategies to support students: including tutoring sessions,
supplementalcourses, summer learning experiences, after-school programs, teacher advisors, and
volunteermentors, as well as alternative ways of grouping, counseling and instructing.
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ABC ACADEMY
Pae 9
SCHOOL PROJECT FEASIBILITY STUDY
2023
2.6
BENEFITS AND IMPACTS OF THE SCHOOL PROJECT
Although the project concept/has initiated for being profitable service delivery business
amongcompetitors, its main implementation role is emphasizing on achieving success delivery of
moderneducation with a strong academic program based upon high expectations for every student.
There is a safe,caring climate of respect and cooperation. Every child, family, and staff member will
be considered asthey make an active choice to be at this school and embraces the idea of an
integrated education.Moreover, the priority need of implementing Fortune Academy project is to
have an education center
which will join hand with the government‟s policy effort enhancing „Education for All‟, which is an
integration of schooling for normal learning Vs Inclusive education for students requiring special
needs inthe school.Therefore, the underlying school project will enable thousands of children to get
proper education andcreate the following positive impact:
It will create access to quality educational facilities and alleviate shortage of class rooms
Enhance the literally knowledge of the beneficiaries which will make them more confident toachi
eve their aims and objectives of life.
The schooling system will inspire the school children to pursue their education and also minimizethe
dropout rate by supporting children from low income family
After Schooling all the beneficiaries
will be able to keep pace with the common people to pursuehigher education and build a bright
career for themselves.
Create a plat form for the dissemination of the information among physically disabled childrenand it
will help to create general awareness among the people.
Each and every year hundreds of physically disabled Children will be inspired to be involved inthe
main stream of society to avail equal opportunity and rights of full participation.
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ABC ACADEMY
Pae 10
SCHOOL PROJECT FEASIBILITY STUDY
2023
III.
MARKET ANALYSIS
3.1
GENERAL OVERVIEW 3.2
EDUCATION SECTOR ANALYSIS
3.2.1
Education Law3.2.2
Education Policy Reform3.2.3
Education Sector Development Plans (ESDPs)3.2.4
Private Sector Inclusive Policy (PSIP)
3.3
SCHOOLING SERVICE SUPPLY
3.3.1
The National Population3.3.2
School Age Population (Five Years Trend)3.3.3
Education Access and Enrollment Level (Nationwide)
3.3.3.1
Number of Schools at National Level 3.3.3.2
School Enrollment Ratios
3.3.4
Education Access and Enrollment Level (Oromia Region)
3.3.4.1
Total Population of the Region 3.3.4.2
Number of Schools in Oromia 3.3.4.3
School Enrollment Ratios 3.3.4.4
Pupil Section Ratio (PSR) of Education System in Ethiopia 3.3.4.5
Pupil Teacher Ratio (PTR) at Different Level of Education
3.4
DEMAND CONSIDERATIONS
3.4.1
Current Demand/Market
Needs3.4.2
Demand Projection
3.5
DEMAND AND SUPPLY GAP3.6
MARKETING STRATEGY
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ABC ACADEMY
Pae 11
SCHOOL PROJECT FEASIBILITY STUDY
2023
IV.
TECHNICAL STUDY
4.1
DESCRIPTION OF PROJECT LOCATION
4.2
PROJECT LAND REQUIREMENT, DESIGN AND INVESTMENT
4.2.1
Project Land Requirement
4.2.2
Project Land Allocation
4.2.3
Construction Design and Space Distribution
4.3
CAPACITY AND SERVICE PROGRAMME4.4
SERVICE DELIVERY PROCESS
4.4
CAPITAL INVESTMENTS AND RELATED COSTS
4.5
MATERIALS AND INPUT FOR SCHOOL OPERATION
V.
ORGANIZATION AND MANAGEMENT
5.1
ORGANIZATIONAL STRUCTURE5.2
MANPOWER REQIRED
5.3
TRAINING REQUIREMENT
VI.
FINANCIAL FEASIBILITY ANALYSIS
6.1
BASIC ASSUMPTIONS
6.2
REVENUE AND OPERATING COST ASSUMPTION6.3
RESULT OF FINANCIAL ANALYSIS
VII.
ANNEXES
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