The intention of viability Gap Financing is to make the commercially nonviable infrastructure projects attractive to private investor through PPP arrangement and to undertake the project more effectively under the close supervision of the government. The VGF concept has been evolved to achieve the following objectives in implementing PPP projects :
(a) To attract more private investment in the country's infrastructure development through the provision of capital grant and or annuity;
(b) To enable the government to bring in more projects contributing a portion of costs of individual projects and maximize the use of private capital for building infrastructure in Bangladesh;
(c) To make the project bankable, Financial Institutions get comfort with VGF (Capital grant) along with equity drawdown at the front end of project construction.