Monetisation of assets of POWERGRID
Part of: GS Prelims and GS-III- Economy; Infrastructure
- 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.