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Power Grid authorized to monetize subsidiary assets

By IndianMandarins- 09 Sep 2020


Infrastructure Investment Trust (InvIT) will assist Power Grid Corporation of India Limited to monetize its subsidiary assets.  
On Tuesday, the Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, has approved Power Grid's proposal to monetize its Tariff Based Competitive Bidding (TBCB) assets held in existing Special Purpose Vehicle (SPVs) including those which are either under construction or shall be acquired by the company in future
“The approval would facilitate Power Grid ... asset monetization of its identified TBCB transmission assets ... so that the proceeds from the asset monetization could be utilized for fresh investment in the transmission network expansion and other capital schemes of the company. In the first block, Power Grid would be able to monetize 5 TBCB assets of a gross block of Rs 7164 crore (as on September 2019),” the Cabinet Committee on Economic Affairs (CCEA) stated.
It clarified that the assets proposed for monetization through InvlT were operational assets proposed to be managed by the existing manpower of POWERGRID already deputed for this purpose and therefore no additional employment generation was envisaged with regard to them. “However, additional employment opportunities are likely in services incidental to InvlT, such as merchant banking, legal advisory, trusteeship, financial and taxation consultancy, valuation, printing, advertisement and in allied activities,” it stated.
The statement said that monetization of the first block of eligible TBCB SPVs would be in FY 2020-21. “Based on the experience gained and depending upon the eligibility for monetization of TBCB SPVs, further monetization shall be carried out in future, as per the directives and targets fixed by the Government of India,” the CCEA said.

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