Viability Gap Funding

Viability Gap Funding

  • There are many projects with high economic returns, but the financial returns may not be adequate for a profit-seeking investor.
  • For instance, a rural road connecting several villages to the nearby town.
  • This would yield huge economic benefits by integrating these villages with the market economy, but because of low incomes it may not be possible to charge user fee.
  • In such a situation, the project is unlikely to get private investment.
  • In such cases, the government can pitch in and meet a portion of the cost, making the project viable.
  • This method is known as viability gap funding.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

<span>%d</span> bloggers like this: