"The guidelines are almost ready and it would be taken up by the Cabinet Committee on Economic Affairs for approval shortly," a finance ministry official said.
Subject to Cabinet approval, the guidelines for the viability gap funding scheme is likely to be put in place by the end of this month.
The scheme, which is likely to propose a minimum 51 per cent private equity participation for availing viability gap funding, would be taken up by Cabinet after Prime Minister Manmohan Singh returns from his US visit.
Finance Minister P Chidambaram had announced a Rs 1,500 crore viability gap funding scheme for infrastructure projects in his Budget for 2005-06.
The viability gap funding would be used along with the proposed Special Purpose Vehicle for pushing up investment in the infrastructure sector.
Apart from Rs 1,500 crore viability gap funding scheme, sources said the government also proposes to raise Rs 10,000 crore (Rs 100 billion) in long term bonds this fiscal for Infrastructure SPV. The SPV can then lend the funds to various mega projects in roads, ports, airports and tourism sectors.
The infrastructure projects would be appraised by an Inter-Institutional Group of banks and financial institutions. The SPV will lend funds for longer term maturity directly to eligible projects to supplement other loans from banks and financial institutions.
The ministry official said the modalities for the SPV will also be worked out shortly. The move assumes importance in the light of Chidambaram's recent meeting with chief financial officers of leading business houses, who have asked government to create a conducive climate for investment especially in infrastructure sectors so that big ticket capital expenditure takes off the ground.
Though government has identified many infrastructure projects that are financially viable but are unable to take off the ground due to paucity of resources.