Govt launches scheme to support PPP projects | The Financial Express

Govt launches scheme to support PPP projects

As a central sector scheme, the IIPDF programme will support the PSAs to create a shelf of bankable viable PPP projects.

Govt launches scheme to support PPP projects
The government has been planning to make the PPP projects more attractive through fiscal and other forms of support.

The government has launched a scheme to extend financial assistance to cover development expenses of projects made through public-private partnerships (PPPs).

The finance ministry has come out with the India Infrastructure Project Development Fund (IIPDF) scheme to provide support to project sponsoring authorities (PSAs), both in the Central and state governments, for meeting the cost of transaction advisors and consultants engaged in the development of PPP projects.

As a central sector scheme, the IIPDF programme will support the PSAs to create a shelf of bankable viable PPP projects. Funding under this scheme will be in addition to the already-operational Scheme for Financial Support to PPPs in Infrastructure, essentially a viability gap funding (VGF) scheme, notified in December 2020. Under the VGF scheme, support is granted for PPP infrastructure projects that are economically justified but commercially unviable.

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The latest move follows the government’s unprecedented infrastructure push in the aftermath of the pandemic to create durable assets, spur employment and stimulate economic growth, betting on its high-multiplier effect.

A government task force on the National Infrastructure Pipeline (NIP) had in April 2020 envisaged capital investments of Rs 111 lakh crore until FY25. The centre (39%) and the states (40%) are expected to have almost an equal share in the NIP implementation, followed by the private sector (21%). To attract private players, the government has been planning to make the PPP projects more attractive through fiscal and other forms of support.

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First published on: 05-11-2022 at 02:45 IST