Power Grid assets to be monetised via InVITs, says CCEA
NEW DELHI: The Cabinet Committee on Economic Affairs (CCEA) on Tuesday allowed Power Grid Corporation of India Limited (POWERGRID) to undertake a monetisation of its tariff projects, which it won through competitive bidding, estimated at Rs 7,164 crore.
The approval covers assets held in existing Special Purpose Vehicle (SPVs) and wil be done through Infrastructure Investment Trusts (InvIT). The Centre said that the proceeds will be used for new investment in expanding the transmission network and other capital schemes.
In the first block, POWERGRID would be able to monetise 5 TBCB assets of the gross block of Rs 7,164 crore,” an official statement said, “Proceeds from the asset monetisation could be utilised for fresh investment in the transmission network expansion and other capital schemes of the company”. This monetisation will be carried out as per the directives and targets fixed by the Centre and it’s larger plan to monetise assets of state-run companies.
“The assets proposed for monetisation through InvlT are operational assets proposed to be managed by the existing manpower of POWERGRID already deputed for this purpose, and therefore no additional employment generation is envisaged with regard to them. However, additional employment opportunities are likely in services incidental to InvlT, such as merchant banking, legal advisory, trusteeship, financial and taxation consultancy, valuation, printing, advertisement and in allied activities,” the statement added.
This is also likely to change the central public sector enterprise (CPSE) character of Maharatna SPVs and follows the new public sector enterprise policy that has been articulated by the government. “The Budget 2019-20 emphasized investment led growth and indicated that new and innovative financial instruments including Infrastructure Investment Trusts (InvlTs), have been launched as part of the brown field asset monetisation strategy for augmenting infrastructure investment,” the Centre said.