Monetisation of assets of POWERGRID

Monetisation of assets of POWERGRID

Part of: GS Prelims and GS-III- Economy; Infrastructure

In news

• The Cabinet Committee on Economic Affairs has approved monetisation of assets of POWERGRID.
• It is a Public Sector Undertaking (PSU) under the Ministry of Power, through the Infrastructure Investment Trust (InvIT) model.

• This is the first time any PSU in the Power Sector will undertake asset recycling by monetising its assets through the InvIT model.
• It will use the proceeds to fund the new and under-construction capital projects.
• This approval would help POWERGRID to monetise in the first lot, assets with gross block value of more than 7000 crore. 
• These assets, which are mainly High Voltage Transmission lines and substations, are held by POWERGRID in form of Special Purpose Vehicles (SPVs).

Important value additions 

Infrastructure Investment Trusts (InvIT)

• It is like a mutual fund.
• It enables direct investment of small amounts of money from possible individual/institutional investors in infrastructure to earn a small portion of the income as return.

Do you know?

• POWERGRID, a public limited company under the administrative control of the Ministry of Power, Government of India, started its commercial operation in the year 1992-93 and is today, a Maharatna company, engaged in the business of power transmission.