News: NMP has monetised Rs 3.85 lakh crore of assets in 3 years.
About National Monetization Pipeline (NMP)
- The National Monetization Pipeline (NMP) aims to unlock value in brownfield projects by engaging the private sector.
- Announced in the Union Budget 2021-22, it targets monetizing assets worth Rs 6 lakh crore.
- It involves transferring revenue rights, not ownership, and using the funds for nationwide infrastructure.
- NMP runs co-terminus with the National Infrastructure Pipeline (NIP) announced in December 2019.
- NIP includes both economic and social infrastructure projects.
About Monetization
- The government transfers revenue rights to private parties for a specified period in return for upfront money, revenue share, and investment commitments.
- Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) are key structures for monetizing assets in the roads and power sectors.
- These trusts are listed on stock exchanges, offering liquidity to investors through secondary markets.
- This strategy aims to enhance infrastructure funding and maximize asset value.
- Other monetisation models on PPP (Public Private Partnership) basis –
- Operate Maintain Transfer (OMT)
- Toll Operate Transfer (TOT)
- Operations, Maintenance & Development (OMD)
- Greenfield and Brownfield Investment
- Greenfield Project – Investment in a manufacturing, office, or other physical company-related structure or group of structures in an area where no previous facilities exist.
- Brownfield investment – The projects which are modified or upgraded are called brownfield projects.
