The Union Cabinet chaired by the PrimeMinister Shri Narendra Modi has approved the Feasibility Gap Fund (VGF) scheme ata total cost of INR 7,453-crore for offshore wind power projects, including INR6,853-crore for construction of offshore wind power projects of 1.0 GW capacity(500 MW each off the coast of Gujarat and Tamil Nadu) and INR 6,853-crore forcommissioning of these projects and logistics requirement of offshore windpower projects. For the upgradation of two ports (category improvement), theexpenditure includes a grant of INR 600-crore.

According to industry experts, the supportfrom the government through the VGF scheme will reduce the cost of power inoffshore wind projects and discoms. It will be viable for procurement.

Projects will be set up by privatedevelopers selected through transparent bidding process, while power generationinfrastructure including offshore substations will be set up by Power GridCorporation of India Ltd. (PGCIL). To ensure successful implementation of thescheme, the Ministry of New and Renewable Energy, as the nodal ministry, willcoordinate with various ministries/departments.

The construction and implementation ofoffshore wind power projects require specific port infrastructure, which canhandle the storage and movement of heavy and large-sized equipment. Under thisscheme, two ports in the country will get support from the Ministry of Ports,Shipping, and Waterways to meet the development needs of offshore wind powerprojects.