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NHPC to monetise 10 projects to generate funds

September 2019

As reported, in tune with India’s enterprising infrastructure goals, the state-run public sector units (PSUs) are seeking out means to garner funds, which include tapping the infrastructure investment trust (InvIT). 

Hydropower giant NHPC, the first firm to take up the idea, is planning to leverage InvITs to monetise around 10 of its 22 projects. 

InvITs are essentially, trusts that handle all infrastructure assets that can generate income, usually providing investors with regular yield and a liquid method of investing in projects. 

To take this forward, NHPC is set to appoint an advisor in order to fully understand the feasibility of all asset monetisation options for hydropower projects. The consultant will list out all possible routes and will also conduct a cost-benefit analysis of various schemes.

In her maiden budget, Finance Minister Nirmala Sitharaman has increased the divestment target from Rs 900 billion to Rs 1.5 trillion for the current fiscal year, with a special focus on consolidating PSUs and strategic disinvestment. All proceeds from the disinvestment will aid the Centre to boost India’s infrastructure by investing around Rs 100 trillion in the next five years. 

The National Highways Authority of India (NHAI) is also looking at generating funds of around Rs 850 billion through InvITs and the toll-operate-transfer (ToT) model.