The Indian central government aims to garner over Rs 45,200 crore by monetising power transmission assets by FY 2025 as part of its ambitious asset monetisation plan.
Finance Minister Nirmala Sitharaman announced a Rs 6 lakh crore National Monetisation Pipeline (NMP) that will look to unlock value in infrastructure assets across sectors ranging from power to road and railways.
The transmission assets considered for monetisation during FY 2022-25 aggregate to 28,608 circuit (ckt) kms. These include transmission assets of 400 KV and above of Power Grid Corporation of India Limited (PGCIL).
The total value of assets considered for monetisation is estimated at Rs 45,200 crore over FY 2022-25, the NMP document said. “Assets to be monetized during FY22 includes the PGCIL’s InvIT issue transaction for which has already been concluded during April-June quarter of FY22. “FY23, FY24 and FY25 — Aggregate length of 23,734 ckt kms has been considered for monetisation during this period,” it said.
Out of the total transmission asset base of PGCIL, the scale of transmission assets with capacity of 400 KV and above (1.56 lakh ckt kms) was estimated. The monetisation potential is available in this category of long-distance transmission assets. This includes a mix of Tariff Based Competitive Bidding (TBCB) and Regulated Tariff Mechanism (RTM) assets.
While most TBCB assets of PGCIL are expected to be bought under the PGCIL InvIT over a period of time, inclusion of additional assets from RTM category is critical to achieve the required scale in monetisation, it said. The transmission assets considered for monetisation over FY 2022-25 depend on factors such as transmission charges, asset availability and asset mix.
The total transmission assets considered for monetisation aggregate to 28,608 ckt kms. The indicative monetisation value of the transmission assets has been considered based on a factor of Rs 1.58 crore per ckt km. “It may be noted that this is only an indicative value and the actual realisation and valuation would depend on factors such as asset profile, transaction structure and market conditions,” the NMP said.