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Govt notifies enhanced financial support for Central, state PPP projects

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The Centre has revamped and broadened the India Infrastructure Project Development Fund Scheme with an aim to provide financial assistance in meeting the cost of transaction advisors and consultants engaged in the development of Public-Private Partnership projects, as per a statement and a gazette notification by the Finance Ministry on Friday, the corpus of this fund is Rs 150 crore for three years.


“PPPs are being encouraged to bring private capital and efficiency in execution and operation of infrastructure projects. Besides, new schemes and initiatives are being introduced to provide financial and technical support to the private sector, wherever necessary,” the statement said.


As a Central Sector Scheme, the India Infrastructure Project Development Fund Scheme (IIPDF Scheme) will aid development of quality PPP projects by providing necessary funding support to the project sponsoring authorities, both in the central and state Governments, for creating a shelf of bankable viable PPP projects for achieving the vision of modern infrastructure for the country.


Funding under IIPDF Scheme is in addition to the already operational Scheme for Financial Support to PPPs in Infrastructure (Viability Gap Funding, or VGF Scheme) notified on December 7, 2020, through which infrastructure projects undertaken through PPP mode that are economically justified but commercially unviable are supported.


“A key step in structuring quality PPP projects is to provide quality advisory/ consultancy services to the Project Sponsoring Authorities (PSAs). However, procurement of such services is a time consuming and difficult process often resulting in delays in onboarding of the appropriate Transaction Advisers (TAs) or non-optimal structuring of PPP projects,” the statement said.


“The features of existing IIPDF, which was set up in 2007, are enhanced and the fund is restructured as a Central Sector Scheme with total outlay of Rs 150 crore for a period of three years from 2022-23 to 2024-25,” as per a gazette notification.


In her 2022 Union Budget speech, Finance Minister Nirmala Sitharaman had said that for financing infrastructure needs, stepping-up of public investment will need to be complemented by private capital at a significant scale.


“Measures will be taken to enhance financial viability of projects including PPP, with technical and knowledge assistance from multilateral agencies. Enhancing financial viability shall also be obtained by adopting global best practices, innovative ways of financing, and balanced risk allocation,” she had said.

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