The Department of Economic Affairs (DEA) under the Ministry of Finance, GoI notified a scheme for the financial support for project development expenses of Public Private Partnership (PPP) projects. The scheme is called India Infrastructure Project Development Fund (IIPDF) Scheme. In this article, you can learn all about the IIPDF Scheme for the UPSC exam polity and governance segments.
IIPDF Scheme (India Infrastructure Project Development Fund)
IIPDF scheme is a central sector programme that will facilitate the development of quality PPP (Public Private Partnership) projects by providing necessary funding support to the Project Sponsoring Authorities (PSAs) both in the Central and State Governments.Â
- It will help in creating a shelf of bankable viable PPP projects for achieving the vision of modern infrastructure for the country.Â
- Funding under the IIPDF scheme is in addition to the already operational scheme for financial support to PPPs in infrastructure (Viability Gap Funding Scheme (VGP) – Read about the VGP scheme in PIB dated Nov 11, 2020).
- The corpus of the IIPDF shall comprise an initial budgetary outlay of Rs 100 cr by the Ministry of Finance. This would be supplemented, if the need arises, through budgetary support by the Ministry of Finance from time to time.Â
- The IIPDF will be administered by an Empowered Institution. It will –
- Select projects for which project development costs will be funded. Â
- Set the terms and conditions under which the funding will be provided and recovered.
- Set milestones for disbursing and recovering (where appropriate) the funding.Â
- The Public Private Partnership cell of the Department of Economic Affairs, GoI will provide support functions to the Empowered Institution to examine the applications received for assistance under IIPDF.
Significance of the IIPDF
- The procurement costs of PPPs, especially the costs of transaction advisors, are substantial and usually pose a burden on the Sponsoring Authority’s budget.
- The IIPDF is identified as the mechanism by which the Sponsoring Authority can source funding to cover a part of the PPP transaction costs, helping to reduce the impact of procurement costs on their budgets.
Public Private Partnership (PPP)
- It involves collaboration between a government agency and a private sector company that can be used to finance, build and operate projects.
- PPP is a tool to get more quality infrastructure to more people. When designed well and implemented in a balanced regulatory environment, PPPs can bring greater efficiency and sustainability to the provisions of public services such as transport, energy, telecommunication, healthcare, sewerage system, etc.
- PPPs have been implemented in multiple countries and are primarily used for infrastructure projects. PPPs are being encouraged to bring private capital and efficiency to the execution and operation of infrastructural projects.
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