Energy projects worth Rs 1.6 lakh crore ready for monetisation

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August 24, 2021 2:01 AM

For the first time, hydroelectric power plants of around 3,500 megawatt (MW) and solar and wind power projects of about 2,500 MW owned by Central government companies have been identified for monetisation, and are expected to fetch around Rs 39,832 crore.

The target includes the Rs 7,700 crore already raised through the PGInvIT IPO in May.The target includes the Rs 7,700 crore already raised through the PGInvIT IPO in May.

The government has identified projects worth more than Rs 1.6 lakh crore in the energy sector as potential assets to be monetised by FY25.

For the first time, hydroelectric power plants of around 3,500 megawatt (MW) and solar and wind power projects of about 2,500 MW owned by Central government companies have been identified for monetisation, and are expected to fetch around Rs 39,832 crore.

The asset monetisation programme announced in the FY22 budget had already included oil and gas pipelines of GAIL, Indian Oil Corporation (IOCL) and Hindustan Petroleum Corporation (HPCL) and electricity transmission lines of Power Grid Corporation of India (PGCIL) in the list of assets to be offered to the private sector.

The government expects to raise Rs 24,462 crore through the monetisation of 8,154 km of natural gas pipelines by FY25 through InvIT. Of this, pipelines along 7,928 km are operational, and the rest are expected to become operational within the target period. GAIL’s 1,414 km Dabhol-Bengaluru pipeline and 815 km Dahej-Uran-Panvel-Dabhol pipeline have been identified for monetisation in FY22. As many as 160 coal mining projects are expected to fetch Rs 28,747 crore through asset monetisation by FY25.

Petroleum product and LPG pipelines along 3,930 km of state-run oil marketing companies have been identified for monetisation to fetch Rs 22,503 crore by FY25. The lines include HPCL’s Mangalore-Hassan LPG pipeline, which will be monetised in FY23. Two hydrogen generation plants at IOCL’s Gujarat refinery are also up for monetisation with an estimated value of Rs 1,200 crore.

Other asset classes from IOCL include effluent treatment plants, sulphur recovery units and flare gas recovery systems with an estimated value of about Rs 10,000 crore. None of BPCL’s assets have been mentioned in the list of projects to be monetised.

PGCIL has already monetised five transmission assets through the IPO of POWERGRID Infrastructure Investment Trust (PGInvIT), marking the first time a PSU in the power sector has monetised its assets through the InvIT model. For FY22-25 around 28,608 ckm of PGCIL’s transmission assets, constituting around 17% of the company’s total asset base, have been considered for monetisation at an expected value of Rs 45,200 crore. The target includes the Rs 7,700 crore already raised through the PGInvIT IPO in May.

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