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Business News/ Economy / Electricity assets worth 15K cr set for monetization
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Electricity assets worth ₹15K cr set for monetization

Along with the monetization of transmission and other assets, the listing of NTPC Ltd’s renewable energy arm would also be targeted this year

The power sector comprises 14% of the total assets on offer under the national monetization pipeline. (MINT_PRINT)Premium
The power sector comprises 14% of the total assets on offer under the national monetization pipeline. (MINT_PRINT)

NEW DELHI:The Union power ministry aims to raise around 15,000 crore through asset monetization in FY24, close to the previous year’s target of 15,308 crore, a person aware of the development said. However, the government could raise only around 9,400 crore in FY23.

“The ministry is likely to target 15,000 crore worth of asset monetization this year. Along with the monetization of transmission and other assets, the listing of NTPC Ltd’s renewable energy arm would also be targeted this year," the person said on condition of anonymity.

Last year, the Centre and state-run NTPC planned a private placement of the latter’s unit, NTPC Green Energy Ltd, but Malaysia’s Petronas Nasional Bhd, the highest bidder, withdrew its $503 million bid for a 20% stake, prompting NTPC to scrap the plan, upsetting monetization plans. Queries sent to a spokesperson for the power ministry remained unanswered.

Besides, Power Grid Corp. of India Ltd (PGCIL) dropped plans for its second infrastructure investment trust (InvIT) tranche in FY23, contributing to the shortfall in monetization. On 18 January, Mint reported that the state-run transmission major had dropped the plan due to the InvIT route facing issues regarding transparent price discovery, goods and services tax, capital gains, and stamp duty. The firm would now explore monetizing receivables from specific projects by securitizing their cash flows.

The power sector comprises 14% of the total assets on offer under the national monetization pipeline. According to NITI Aayog’s guidebook on the asset monetization plan, the monetization of power transmission assets of 28,608 circuit km would amount to 45,200 crore. Another 39,832 crore is expected to be fetched by the monetization of 6 gigawatts (GW) of renewable energy generation assets, including 3.5GW of hydropower projects and 2.5GW wind and solar assets.

To accelerate the process, the power ministry last year developed guidelines for state governments to identify and monetize brownfield transmission assets to mobilize the proceeds for new infrastructure projects. The Centre suggested the ‘Acquire, Operate, Maintain, and Transfer’ (AOMT) based public-private partnership (PPP) model for the states. Under this model, a special purpose vehicle (SPV), which would own the asset, is bought by the selected investor for a particular time period with associated rights and duties against payment of an upfront lump sum amount.

Apart from power, a few other ministries, including civil aviation and railways, also missed their targets for FY23. Overall, the Centre achieved monetization of assets worth 1.32 trillion in FY23 against a target of 1.62 trillion.

The national monetization pipeline was announced in the Union budget for FY22, with a strategic objective to unlock the value of investments in public sector assets by tapping private sector capital and efficiencies, which can thereafter be leveraged for augmentation or greenfield infrastructure creation.

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Published: 17 Jul 2023, 12:22 AM IST
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