The Pipeline Jugalbandi

Context: National Infrastructure Pipeline (NIP) and National Monetisation Pipeline (NMP), through their complementary role of investing and resourcing infrastructure projects, would ensure the infrastructure-led economic revival of pandemic hit the economy.

About National Infrastructure Pipeline (NIP)

• NIP was launched with around 6,835 infrastructure projects has now expanded to 7,400 projects.
• Funding plan of NIP: includes the creation of development financial institutions focused on infra finance, enhancement of capital expenditure (a 34.5%) and monetization through NMP

Advantages of National Monetisation Pipeline (NMP) for NIP:

• Provide funds through asset monetization: NMP involves selling off, wholly or partially, state-owned brownfield infrastructure assets.
  • For e.g. monetization of assets of NHAI, HPCL, GAIL, and Central Warehouse Corporation.
• Invites domestic and international institutional investment: through Special Purpose Vehicles (SPV), i.e. by setting up of Infrastructure Investment Trusts (InvIT) to hold infrastructure projects.
• Optimistic about private sector capital: investors currently prefer operating brownfield assets over riskier greenfield ones.
  • The government wants to go beyond annual targets and wants to set a monetizable target up to 2024. This will provide more time for the investors to ensure due diligence.
• Enable renewed thrust in infra investments: by recycling funds deployed in previous infra projects in several sectors like roads (Golden Quadrilateral and North East West South corridor), power, ports and airports.