CCEA approves Rs 8,100 cr financial assistance for Infra Viability Gap Funding scheme for PPPs till 2024-25

The Cabinet Committee on Economic Affairs (CCEA) on Wednesday, November 11, 2020, approved continuation and revamping of the Scheme for Financial Support to Public Private Partnerships (PPPs) in Infrastructure Viability Gap Funding (VGF) Scheme till 2024-25 with a total outlay of Rs 8,100 crore. The CCEA was chaired by Prime Minister Narendra Modi.

The aim of this Scheme is to promote Public Private Partnerships in social and economic infrastructure for efficient creation of assets, their proper operation and maintenance and make them economically and socially essential projects commercially viable.

ANI in a tweet said, "Cabinet Committee on Economic Affairs (CCEA) approves continuation and revamping of the Scheme for Financial Support to Public-Private Partnerships in Infrastructure Viability Gap Funding Scheme till 2024-25 with a total outlay of Rs. 8,100 crores."

Briefing reporters in New Delhi after the Cabinet meeting, Finance Minister Nirmala Sitharaman said, this will cater to Social sectors such as Waste Water Treatment, Water Supply, Solid Waste Management, Health and Education sectors.

These projects face bankability issues and poor revenue streams to cater fully to capital costs. She said, the Central Government will provide a maximum of 30 per cent of Total Project Cost (TPC) of the project and the State Government or Sponsoring Central Ministry will provide additional support up to 30 per cent of the total project cost. The new Scheme will come into force within one month. This sub-scheme will support pilot social sectors projects.

In a second sub-scheme, the projects may be from health and education sectors where there is at least 50 per cent operational cost recovery. In such projects, the central government and the state governments together will provide up to 80 per cent of capital expenditure and up to 50 per cent of operation & maintenance (O&M) costs for the first five years, it added.

The Centre will provide a maximum of 40 per cent of the TPC of the Project. Also, it may provide a maximum of 25 per cent of the Operational Costs of the project in the first five years of commercial operations.

Since the inception of the scheme, 64 projects have been accorded 'final approval' with Total Project Cost of Rs 34,228 crore and VGF of Rs 5,639 crore. Till the end of Financial Year 2019-20, VGF of Rs 4,375 crore has been disbursed.