IIPDF Scheme

Why in News?:

Recently, the Department of Economic Affairs (DEA), Ministry of Finance notified India Infrastructure Project Development Fund Scheme (IIPDF Scheme), a scheme for financial support for project development expenses of Public-Private Partnership (PPP) Projects.

What is IIPDF Scheme? : It was set up in 2007.

It is a Central Sector Scheme with total outlay of Rs 150 crore for a period of three years from 2022-23 to 2024-25.

It is available to the Sponsoring Authorities for PPP projects for meeting the project development costs.

It would be necessary for the Sponsoring Authority to create and empower a PPP Cell to undertake PPP project development activities and also address larger policy and regulatory issues.

Objective:

It is aimed to provide financial support for quality project development activities.

Significance:

The Sponsoring Authority will, be able to source funding to cover a portion of the PPP transaction costs, thereby reducing the impact of costs related to procurement on their budgets.

Financial Outlay:

The IIPDF will contribute upto 75% of the project development expenses to the Sponsoring Authority as an interest free loan. The balance 25% will be co-funded by the Sponsoring Authority.

On successful completion of the bidding process, the project development expenditure would be recovered from the successful bidder.

However, in the case of failure of the bid, the loan would be converted into grant.

In case the Sponsoring Authority does not conclude the bidding process for some reason, the entire amount contributed would be refunded to the IIPDF.