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With an aim to kick start the offshore wind energy development in India, the Union Cabinet has approved the Viability Gap Funding (VGF) scheme for offshore wind energy projects at a total outlay of Rs 7453 crore, including an outlay of Rs 6853 crore for installation and commissioning of 1 GW of offshore wind energy projects (500 MW each off the coast of Gujarat and Tamil Nadu), and grant of Rs 600 crore for up-gradation of two ports to meet logistics requirements for offshore wind energy projects.

The VGF scheme is a major step towards implementation of the National Offshore Wind Energy Policy notified in 2015 with an aim to exploit the vast offshore wind energy potential that exists within the exclusive economic zone of India.  The VGF support from the Government will reduce the cost of power from offshore wind projects and make them viable for purchase by DISCOMs. 

The projects will be established by private developers selected though a transparent bidding process, While the power excavation infrastructure, including the offshore substations, will be constructed by Power Grid Corporation of India (PGCIL). Ministry of New and Renewable Energy, as the nodal ministry, will coordinate with various Ministries/Departments to ensure successful implementation of the scheme. The successful commissioning of 1 GW offshore wind projects will produce renewable electricity of about 3.72 billion units annually, which will result in annual reduction of 2.98 million ton of CO2 equivalent emission for a period of 25 years.