Power Grid Corporation of India (POWERGRID) plans to monetize its assets with gross block of more than ₹ 7,000 crore. Power Grid Corporation of India is a Public Sector Undertaking (PSU) under Ministry of Power, Government of India. In a meeting chaired by Prime Minister Narendra Modi, the Cabinet Committee on Economic Affairs has approved monetisation of assets of POWERGRID through Infrastructure Investment Trust (InvIT) model. This is the first time any PSU in Power Sector will undertake asset recycling by monetising its assets through the InvIT model and using 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). Asset recycling is a key strategy of the Government of India to release the capital invested in operational assets and the proposed InvIT of POWERGRID would attract both domestic as well as global investors including Sovereign Wealth Funds. Sale of assets to InvITs is a way of accessing long term, relatively cheap finance required to fund infrastructure projects in Transmission Sector.