Private Infrastructure Development Group

The Private Infrastructure Development Group (PIDG) is a multi-donor organization with members from seven countries (Australia, Germany, the Netherlands, Norway, Sweden, Switzerland, United Kingdom) and the International Finance Corporation of the World Bank Group.

The Technical Assistance Facility (TAF) of PIDG offers Viability Gap Funding (VGF). It targets pro-poor infrastructure projects that are economically viable in the long term but require initial funding for commercial viability and acquisition of private sector investments. VGF is provided to infrastructure public–private partnership projects at the time of financial close to fill funding gaps and reduce upfront capital costs. The VGF grant can be used during construction and/or to supplement the lack of sufficient revenues from user fees in low-income countries.

The following sectors are eligible: water, sanitation, solid waste, transportation, energy.

Infrastructure projects must have strong, measurable, pro-poor impacts. Prioritized projects:

• Strong positive impacts on females or female-headed households
• Strong climate change benefits
• Project location in a fragile or post-conflict state, as defined by any authoritative bilateral or multilateral development agency

Least-developed and low-income countries according to the Development Assistance Committee of the Organisation for Economic Co-operation and Development (OECD) are eligible; TAF donors may consider exceptions.

• Size of coverage: Maximum VGF grant amount is USD 3 million, or 15 per cent of the project’s capital costs (whichever is less). TAF donors may consider exceptions.
• Selection and VGF disbursement:
  • Competitive selection of the project sponsor/operator based on lowest grant required.
  • Financial viability of the project must be demonstrated: cost-benefit analysis, value for money assessment.
  • Equity for the project must be in place prior to VGF grant disbursement.
  • VGF grant disbursement takes place pari passu in case of debt funding.

https://www.pidg.org/what-we-do/companies/taf