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Monetisation of assets of POWERGRID

  • IASbaba
  • September 10, 2020
  • 0
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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.

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