The power sector has a share of around 14 per cent in the total size of the national asset monetization plan announced by Union finance minister Ms Nirmala Sitharaman on August 23, 2021.
The total size of what is known as the National Monetization Pipeline (NMP) is Rs.6 lakh crore (trillion) and it aims to unlock value of brownfield projects by involving the private sector.
The NMP, with a tenure of four years, will include assets spread over infrastructure areas like railways, power, gas pipelines, petroleum product pipelines, telecom, mining, airports and ports. It will also involve urban real estate and warehousing.
The largest components will be roads with an asset size of Rs.1.60 lakh crore and roads with Rs.1.52 lakh crore.
The power sector has a total asset size of Rs.85,032 crore. Of this power generation accounts for Rs.39,832 crore while power transmission has a higher allocation of Rs.45,200 crore. The power sector accounts for little over 14 per cent of the total asset size of NMP. (There has been no formal announcement yet of the national assets proposed to be monetized.)
The monetization aims to create further value for infrastructure creation in the country and explore innovative ways of private sector participation without transfer of government ownership.
There are no issues related to land as this a “brownfield” plan. It means that the assets in the NMP have already been created. However, the assets are either languishing or not fully monetized or under-utilized.
The NMP will run co-terminus with the National Infrastructure Pipeline of Rs.100 lakh crore, which was announced in December 2019. The estimated amount to be raised through monetization of assets under NMP is around 14 per cent of the total Rs.43 lakh crore outlay of the NIP.
