Govt opts for InvIT to monetise 5 PowerGrid projects worth Rs 7,164 crore

NEW DELHI: The government on Tuesday allowed state-run transmission utility PowerGrid to monetise projects won through tariff-based competitive bidding through the InvIT (Infrastructure Investment Trust) route, charting a new course for disinvestment amid the Coronavirus-induced economic slowdown.
A government statement said PowerGrid would be able to monetise five such projects worth Rs 7,164 crore, as on September 2019. The proceeds could be invested into new projects to expand the transmission network and other capital schemes of the company, it said.
This will be the first InvIT offering from any public sector entity.
Typically, companies hive off projects to InvITs, or trusts formed to manage infrastructure assets, once they become operational and begin regular earning. This allows other investors in search of an assured return to step in. This lets the promoter to move on to new projects and provides the funds.