The Cabinet Committee on Economic Affairs (CCEA) is expected to clear the launch of the special purpose vehicle (SPV) for financing viable infrastructure projects on Thursday. The CCEA is also likely to clear the approval procedures for public-private partnership (PPP) projects with capital costs below Rs 100 crore on Thursday.Under the SPV proposal, private companies executing infrastructure projects in power, roads, airports etc would be able to avail finances only for their refinancing. Sources said private ventures that do not fall under the ambit of competitively-bid PPPs would however not be eligible for direct lending from the SPV. The total lending to such private schemes would be limited to 20 per cent of the SPV lending programme.Also, the Centre’s new financing arm, which would raise money from the market with government guarantees, would assign priority to public sector projects and competitively-bid PPPs.In addition, under the SPV structure, the Cabinet is likely to approve a board of seven directors with one representation each from the finance ministry and Planning Commission. However, the inclusion of these government directors on the SPV board would be subject to review after two years, sources said.The SPV was announced in the 2005-06 Budget where Finance Minister P. Chidambaram said it would finance projects to the tune of Rs 10,000 crore. However, differences between the Planning Commission and finance ministry on its working and structure delayed its launch.The SPV, which is expected to be launched with an authorised share capital of Rs 10 crore, would only finance those infrastructure projects that have been cleared by the Inter-Institutional Group of Banks.For PPP projects, where the capital costs are below Rs 100 crore, the CCEA is likely to approve a proposal whereby such projects do not need get a clearence from the appraisal committee. Sources said it would suffice for the promoters of projects where the capital costs or the asset value is under Rs 100 crore to adhere to the finance ministry guidelines.
