The VGF scheme gives government grants to those infrastructure projects where commercial viability is not there but the project is socio-economically desirable. The VGF scheme was launched in 2004 to support projects that come under Public Private Partnerships, specifically in the infrastructure sector.
VGF grants will be available only for infrastructure projects where private sector sponsors are selected through a process of competitive bidding. The VGF grant will be disbursed at the construction stage itself but only after the private sector developer makes the equity contribution required for the project.
The scheme is designed as a Plan Scheme to be administered by the Ministry of Finance and amount in the budget are made on a year-to- year basis.
