How is the government funding done under Viability Gap Funding (VGF)?
The government will provide a Viability Gap Funding (VGF) which shall not exceed 20 per cent of the Total Project Cost; provided that the Government or statutory entity that owns the project may, if it so decides it will provide additional grants out of its budget, but not exceeding a further 20 per cent of the Total Project Cost. VGF under this scheme will normally be in the form of a capital grant at the stage of project construction. Proposals for any other form of assistance may be considered by the Empowered Committee and sanctioned with the approval of Finance Minister on a case-to-case basis. VGF up to Rs. 100 crore for each project may be sanctioned by the Empowered Institution subject to the budgetary ceilings indicated by the Finance Ministry.
