The government proposes to expand the asset monetization programme of transmission utility Power Grid Corporation by including even the Regulated Tariff Mechanism-based assets for sale under the InvlT model.
An InvIT is a pool of money collected from investors to run operational infrastructure projects in return for a regular yield to its unitholders.
Government sources said that the Core Group of Secretaries on Asset Monetization has asked Power Grid to test the market for both Regulated Tariff Mechanism & Tariff Based Competitive Bidding assets worth Rs 10,000 crore each in two phases.
The fresh directive is based on suggestions given by the NITI Aayog to bundle Regulated Tariff Mechanism (RTM) assets (which form 95% of PGCIL’s asset base) along with TBCB assets to improve the viability of the package up for monetization under the InvIT model.
Sources said that a concept note on asset monetization and approvals would be taken by October and the entire process would be completed by January 2021.
The Cabinet Committee on Economic Affairs has already given its approval to the monetization of Power Grid Corporation of India’s TBCB assets held through a special purpose vehicle (SPV), through an Infrastructure Investment Trust (InvIT).
Now, even RTM assets may be bundled in the package to enhance the quantum of the asset monetization exercise.
The government is looking at asset monetization for Power Grid so that its proceeds could be utilized for fresh investment in the transmission network expansion and other capital schemes of the company.
Monetisation of the first block of eligible SPVs is expected to be completed in FY 2020-21. Based on the experience gained and depending upon the eligibility for monetization further monetization shall be carried out in the future, as per the directives and targets fixed by the Government of India.
