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climate finance initiatives in India, there is also scope for private sector 3.2
funding in a national climate fund.
2.2.6 Public–Private Partnerships
Effectively engaging the private sector is crucial to filling the financing
gap for mitigation. Therefore, a mechanism is required to deploy
limited public funds in such a manner that private low carbon
capital can be mobilized at scale. Public-private partnerships (PPPs)
represent an option to augment the government’s infrastructure
delivery standards.
At the national level, the Indian government has laid out a well-
defined framework for undertaking PPP projects. The viability gap
funding (VGF) mechanism, formation of the India Infrastructure
Finance Corporation Limited (IIFCL), and the India Infrastructure
Project Development Fund have been designed to meet specific
requirements of PPP projects, and provide the framework and
incentives for urban local governments to promote PPP.
The Union Cabinet in April, 2015 approved the Smart Cities Mission
and the Atal Mission for Rejuvenation and Urban Transformation
(AMRUT) with outlays of INR 48,000 crore (approx. USD 8 billion) and
INR 50,000 crore (approx. USD 8.33 billion), respectively. Under Smart
Cities Mission, the government would give an assistance of INR 100
crore (approx. USD 16.67 million) per year for five years so that 100
smart cities to be developed to promote adoption of smart solutions for
efficient use of available assets, resources, and infrastructure with the
objective of enhancing the quality of urban life and providing a clean
and sustainable environment. But considering the enormous amount
of infrastructure needed to raise such cities, INR 100 crore is a small
amount and substantial efforts would be needed to supplement city
development with other sources of financing. The Smart Cities project
is expected to be achieved through active public private participation
wherein the government will provide VGF and act as facilitator (Prime
Minister’s Office 2015). In addition, the second phase of the Jawaharlal
Nehru National Urban Renewal Mission (JNNURM), renamed as
AMRUT, which is a 10-year programme slated to rejuvenate 500 towns
and cities, led by the Ministry of Urban Development, Government
of India is also expected to promote PPPs in urban India. Minimum
investment of over INR 2 lakh crore (approx. USD 33.33 billion)
would flow into urban areas over the next five years for promoting
urban reforms. It is envisaged that to meet this massive requirement,
substantial private investment will have to be mobilised by states
Chapter 2 Innovative Financing for Low Carbon Development 273
funding in a national climate fund.
2.2.6 Public–Private Partnerships
Effectively engaging the private sector is crucial to filling the financing
gap for mitigation. Therefore, a mechanism is required to deploy
limited public funds in such a manner that private low carbon
capital can be mobilized at scale. Public-private partnerships (PPPs)
represent an option to augment the government’s infrastructure
delivery standards.
At the national level, the Indian government has laid out a well-
defined framework for undertaking PPP projects. The viability gap
funding (VGF) mechanism, formation of the India Infrastructure
Finance Corporation Limited (IIFCL), and the India Infrastructure
Project Development Fund have been designed to meet specific
requirements of PPP projects, and provide the framework and
incentives for urban local governments to promote PPP.
The Union Cabinet in April, 2015 approved the Smart Cities Mission
and the Atal Mission for Rejuvenation and Urban Transformation
(AMRUT) with outlays of INR 48,000 crore (approx. USD 8 billion) and
INR 50,000 crore (approx. USD 8.33 billion), respectively. Under Smart
Cities Mission, the government would give an assistance of INR 100
crore (approx. USD 16.67 million) per year for five years so that 100
smart cities to be developed to promote adoption of smart solutions for
efficient use of available assets, resources, and infrastructure with the
objective of enhancing the quality of urban life and providing a clean
and sustainable environment. But considering the enormous amount
of infrastructure needed to raise such cities, INR 100 crore is a small
amount and substantial efforts would be needed to supplement city
development with other sources of financing. The Smart Cities project
is expected to be achieved through active public private participation
wherein the government will provide VGF and act as facilitator (Prime
Minister’s Office 2015). In addition, the second phase of the Jawaharlal
Nehru National Urban Renewal Mission (JNNURM), renamed as
AMRUT, which is a 10-year programme slated to rejuvenate 500 towns
and cities, led by the Ministry of Urban Development, Government
of India is also expected to promote PPPs in urban India. Minimum
investment of over INR 2 lakh crore (approx. USD 33.33 billion)
would flow into urban areas over the next five years for promoting
urban reforms. It is envisaged that to meet this massive requirement,
substantial private investment will have to be mobilised by states
Chapter 2 Innovative Financing for Low Carbon Development 273
