VGF

The Viability Gap Funding (VGF) is a fund assistance facility provided by the GoI to the private players in the infrastructure projects being developed under public private partnership (PPP). The fund is given by the GoI as one time ‘grant’ and it could be maximum 20 per cent of the project cost (in special cases an additional 20 per cent might be approved by the ststes/ministries/authorities).

The facility which was operationalised in September 2006, was aimed at attracting private investment towards this socio-economically desirable sector. Several infra projects were economically ‘non-viable’ which used to discourage private players away from such projects—this facility encourage them to take part.