Govt working on plan to securitise revenue of central power plants

The government is working on a proposal to escrow revenue from existing central power plants to utilise it as an upfront amount for new projects. It is also considering listing subsidiaries of power PSUs like NTPC and gradually offloading up to 49 per cent stake in them, a senior official said.

As per the proposal, revenue of ongoing projects can be escrowed in the name of successful bidders for 10-15 years.

While the buyers get assured income for a long term, the power companies get to invest the amount left after debt servicing and operation and maintenance costs in new projects, the official said.

The central government has announced a ₹6 lakh-crore plan of leasing assets of PSUs in roads, railways and power for 25 years, after which they will be returned back to the government. Besides infrastructure investment trusts (InvITs) of power assets, it is looking to monetise land parcels with PSUs worth ₹10,000 crore through an e-bidding platform.

“Tariffs of power plants are certain for a longer period. Discussions have been held between concerned government departments to explore the revenue securitisation plan,” the official said, adding, a strong interest is expected from global and domestic pension funds, domestic mutual funds and insurance funds.

The Centre is also considering offloading stake in NTPC’s renewable arm, NTPC Renewable Energy, and trading arm, NVVN, after listing them in the next 1-2 years.

ET Energy World
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