PowerGrid to monetise 5 units worth Rs 7,000cr

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NEW DELHI: The government on Tuesday allowed state-run transmission utility PowerGrid to monetise projects won through tariffbased competitive bidding through the InvIT (Infrastructure Investment Trust) route, charting a new course for disinvestment amid the economic slowdown.
A government statement said PowerGrid would be able to monetise five such projects worth Rs 7,164 crore, as on September 2019. The proceeds could be invested into new projects to expand the transmission network and other capital schemes of the company, it said. This will be the first InvIT offering from any public sector entity.
PowerGrid may use funds for network expansion
Typically, companies hive off projects to InvITs, or trusts formed to manage infrastructure assets, once they become operational and begin regular earning. This allows other investors in search of assured return to step in. This lets the promoter to move onto new projects and provides the funds.
The move comes against the backdrop of the government’s disinvestment target being stalled by the impact of Covid-19 raising doubts about its ability to raise a record Rs 2.1 lakh crore set for the current fiscal year. In fact, during presentations to PM Narendra Modi a few weeks ago, his economic advisers had suggested that assets monetisation could help the government cover a part of the higher spending needed for providing another economic stimulus to revive growth.
The statement said Power-Grid could utilise the funds raised for network expansion or other capital projects.
The premium generated during the monetisation will boost PowerGrid’s net worth but the Maharatna’s SPVs will lose their status as central public sector undertakings.
The government had suggested the InvIT route to staterun entities as an alternative mechanism for raising funds to reduce dependence on government support.



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