Vgf Agreement

Support under this scheme is only possible for infrastructure projects in which private sector sponsors are selected through a tendering process. Project agreements must also respect best practices that ensure optimal value for money for public funds and safeguard the interests of users. The project`s leading financial institution is responsible for regular monitoring and evaluation of project execution, with agreed milestones and performance levels, including grants. The VGF will only be paid after the private company has subscribed and spent the necessary equity contribution to the project. Project agreements must also follow best practices that ensure optimal value for money for public funds. Major financial institutions should regularly monitor and evaluate the payment of grants. VGF grants are only awarded for infrastructure projects in which private sector sponsors are selected through a tendering process. The VGF grant will be paid during the construction phase itself, but only after the private developer has provided the necessary equity contribution to the project. The project`s leading financial institution is responsible for regular monitoring and evaluation of project execution, with agreed milestones and performance levels, including grants. Viability Gap Funding (VGF) means a one-time or deferred grant to support infrastructure projects that are economically justified but not due to financial sustainability. The lack of financial viability results from long gestation periods and the inability to increase user fees at a commercial level.

Infrastructure projects also include externalities that are not adequately accounted for in the developer`s direct financial revenues. The provision of catalytic assistance at the cost of capital can make several projects eligible and help mobilize private investment in infrastructure. The VGF guidelines were amended as follows: following the firm`s decision, it was decided to establish a committee and institution authorized to approve grants for projects that met all the eligibility criteria set out in the August 18, 2005 program communication.

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