Viability Gap Finance means a grant to support projects that are economically justified but not financially viable.

• 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.
• Such a grant under VGF is provided as a capital subsidy to attract the private sector players to participate in PPP projects that are otherwise financially unviable.
• Projects may not be commercially viable because of the long gestation period and small revenue flows in future.
• The VGF scheme was launched in 2004 to support projects that come under Public-Private Partnerships.

Source: EPIC, July 2021.