Question
In 2024, the government approved the Viability gap
funding scheme for which of the following type of projects?Solution
"the Scheme for Financial Support to PPPs in Infrastructure" (Viability Gap Funding Scheme) was launched in 2006 with a view to support infrastructure projects undertaken through PPP mode that are economically justified but commercially unviable due to large capital investment requirements, long gestation periods and the inability to increase user charges to commercial levels. In this existing Scheme, VGF up to 40%of the Total Project Cost (TPC) is provided by the Government, of India (Gol) and the sponsoring authority in the form of capital grant at the stage of project construction (20%+20%).  In 2024, the government approved the VGF scheme  for offshore wind energy projects with a total outlay of Rs.7453 crore. Offshore wind is a source of renewable energy  which offers several advantages such as higher adequacy & reliability, lower storage requirement. Â
- The scheme includes the installation and commissioning of 1 GW (Gigawatt) of offshore wind energy projects with an outlay of Rs. 6853 crore, featuring 500 MW wind energy projects off the coasts of Gujarat and Tamil Nadu.
- The VGF scheme, overseen by the Ministry of New and Renewable Energy ,  is a major step towards implementing the National Offshore Wind Energy Policy notified in 2015 .
- The VGF support from the Government will reduce the cost of power from offshore wind projects and make them viable for purchase by Distribution Companies (DISCOMs).
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