Archive · 9 Nov 2025
Centre Proposes Monetising Power Transmission Assets via PPP Model
The government wants to let private companies temporarily take over and manage some of the electricity wires that transmit power across the country.
This is a way for the government to get money from these existing assets and hopefully make them run even better.
Private companies would operate these for a set time.
To make this work, rules need to be clear so investors know how they will get paid and how much they can charge, which helps them feel safe investing.
The government is asking electricity regulators to help create these rules.
States have worried about getting paid and taxes.
So, the plan needs careful thought, especially about how to price the service and handle taxes.
For some old assets, a new company might need to be created, and it would need special permission to operate.
Experts will check the technical side and the value of the assets.
Important legal papers will be created to manage the deal.
The Centre, via the Central Electricity Authority, has proposed a model to monetize public sector power transmission assets.
The proposed Acquire, Operate, Maintain, and Transfer (AOMT) model is part of a Public Private Partnership (PPP) framework.
This initiative aims to enhance efficiency and unlock the financial value of existing transmission infrastructure.
State governments have previously raised concerns regarding revenue certainty, tax implications, and payment security.
The concept note emphasizes the need for a systematic process including technical due diligence, financial valuation, and detailed legal documentation.
- Who
- The Central Electricity Authority (CEA) on behalf of the Centre
- What
- Circulated a concept note to outline key aspects for monetising public sector transmission assets using an Acquire, Operate, Maintain, and Transfer (AOMT) model.
- When
- Recently (specific date not provided, but related to a 2022 framework)
- Where
- Across India, involving central and state electricity regulatory commissions and state governments.
- Why
- To enhance efficiency, unlock financial value of existing infrastructure, and attract private investment as part of the government's asset monetisation strategy.
Government Proposal
State Concerns
Revenue and Tariff Structure
Government Proposal
The government aims to enhance efficiency and unlock financial value through the Acquire, Operate, Maintain, and Transfer (AOMT) model, with a focus on clear and stable tariff structures for investor confidence.
State Concerns
State governments have raised concerns about revenue certainty, tax implications, and payment security for intra-state transmission charges, particularly for Real Time Market (RTM) assets where tariffs are fixed by regulators.
Asset Transfer Process
Government Proposal
The proposed framework involves identifying suitable assets, potentially demerging Regulated Tariff Mechanism (RTM) assets into a Special Purpose Vehicle (SPV) to obtain a license for AOMT operations.
State Concerns
State transmission utilities and investors are concerned about predictable cash flow for monetised assets, highlighting the complexities of transferring assets within existing regulatory frameworks.
- Model
- Acquire, Operate, Maintain, and Transfer (AOMT) under Public Private Partnership (PPP)
- Issuing Body
- Power Ministry (2022 framework)
- Circulated By
- Central Electricity Authority (CEA)
- Target Audience
- Forum of Regulators (joint body of central and state electricity regulatory commissions)
- Key Professionals Appointed
- Technical consultant, Independent valuer
- Required Documentation
- Transfer agreement, Transmission service agreement