What a lender’s independent engineer actually certifies

Begin with the purpose of the certificate

A lender needs a technical view of project progress when considering a drawdown. The original RBI Project Finance Directions, paragraph 21, assign certification of completion stages to the lender’s independent engineer or architect. The current NBFC Credit Facilities Directions retain that requirement in paragraph 75.

Source: RBI NBFC Credit Facilities Directions, paragraph 75 ↗

Define what the appointment covers

The certificate must be read alongside the appointment. At BitCon, we agree the project boundary, reporting dates, documents, site work and expected outputs before beginning an assignment. The title “independent engineer” does not by itself settle every review responsibility.

For example, an appointment may require a periodic progress assessment and a view of remaining technical issues. A separate review may be needed for a specific design calculation or specialist test. Put that distinction in writing so that the lender, project owner and technical team know which questions the report will answer.

Show the basis of the assessment

Our suggested reporting structure starts with the baseline: the agreed scope, programme and information cut-off date. It then separates documents reviewed, site observations, explanations received and the resulting assessment. Where information is incomplete, state that clearly and explain its effect on the conclusion.

Consider equipment reported as delivered to a site. Delivery, installation, testing and readiness for operation are different stages. The report should identify which stage the available evidence supports. A photograph of equipment on the premises cannot answer every question about commissioning readiness.

Similarly, expenditure and physical progress answer different questions. A large advance payment may have limited visible construction behind it, while completed work may await a contractor’s bill. A useful report makes the relationship clear within the agreed scope rather than treating the two percentages as interchangeable.

Make the remaining work visible

A progress percentage is more useful when paired with the principal unfinished activities and dependencies. Which package controls the completion forecast? What decision is outstanding? Has a variation changed the baseline? What evidence is needed before an open item can close?

Our practical recommendation is a short action table: observation, project implication, responsible party and next review date. Retaining unresolved items between reporting cycles helps the appointing institution see whether an issue is improving, drifting or simply being repeated. This is a reporting approach, not a prescribed regulatory template.

Keep technical advice and lending decisions distinct

A technical report contributes evidence to the institution’s decision. It does not itself authorise the release of funds, guarantee repayment or replace the obligations in the relevant loan and construction documents. The lender still needs to consider the conditions and other inputs relevant to the request.

Independence also concerns the engagement’s commercial position. BitCon does not arrange debt on a project where it acts as the lender’s independent consultant. Our lender-side reporting relationship is agreed at appointment and kept separate from owner-side capital advisory.

Before you appoint

Share the institution, project location, current stage and reporting frequency. Ask for the applicable empanelment reference and confirm the service, geographic scope and validity. Then agree the scope and fee basis in writing. This gives both the engineer and the lender a clear starting point for a report that can be used for its intended purpose.