GuarantCo guarantees Axis Bank to provide an INR 2.5 billion loan to Vivriti Capital to lend to e-mobility companies in India
GuarantCo, part of the Private Infrastructure Development Group (PIDG), has provided a 50 percent on-demand credit guarantee to Axis Bank, one of the largest private sector banks in India, to extend an INR 2.5 billion (c. USD 30 million) three-year loan to Vivriti Capital, an India-based, impact focused non-bank financial institution, to support the company’s strategy to expand its portfolio through lending to companies operating in the e-mobility ecosystem in India.
The guarantee is provided under the USD 200 million (INR equivalent) framework guarantee agreement signed by GuarantCo and Axis Bank allowing mobilisation of funds between USD 300 and 400 million (INR equivalent) to finance the e-mobility ecosystem in India. This is the first transaction that GuarantCo has closed under the framework agreement with Axis Bank which was first announced under a Memorandum of Understanding during COP26 in Glasgow in November 2021 after which a framework agreement was signed in May 2022.
The financing solution to Vivriti Capital, as provided by GuarantCo and Axis Bank, is estimated to increase the number of electric vehicles and charging stations deployed which will reduce CO2 emissions and contribute towards progressing the Sustainable Development Goals in India. In addition, up to 665 jobs are estimated to be created through this transaction, 30 percent of which will be held by women.
The transaction makes a direct contribution to SDG 9.4 (upgrade infrastructure and retrofit industries to make them sustainable with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies and industrial processes), SDG 11.2 (provide access to safe, affordable, accessible and sustainable transport systems for all) and SDG 5 (gender empowerment).
Layth Al-Falaki, CEO at GuarantCo, said:
We are delighted to have closed our first transaction under the framework agreement that we signed with Axis Bank in May 2022. The deal with Vivriti Capital will be the first of many under this framework, and we expect it to have a transformational impact on the market and lead to increased lending for the e-mobility ecosystem in India. We will continue to utilise the climate mitigation guarantee agreed with Axis Bank to increase our climate adaptation and mitigation initiatives in line with the PIDG 2030 strategy. The guarantee framework is our largest transaction since our inception in 2005 and we are confident that it will make a significant contribution in accelerating Electric Vehicle usage in India and as a result significantly reduce carbon emissions to help address climate change in the country.”
Rajiv Anand, Deputy Managing Director at Axis Bank said,
Axis Bank is committed to driving sustainable transformation within India’s e-mobility sector. Our partnership with GuarantCo empowers us to extend crucial financial support to Vivriti Capital, thereby aligning with our commitment to drive positive environmental outcomes while empowering communities. Through this blended finance structure, we aim not just to fuel innovation in the e-mobility ecosystem but also to significantly impact climate change by reducing carbon emissions in our country. On the occasion of COP28, we are excited to explore the transformative potential of this framework, underscoring our dedication to advancing a greener, more sustainable future for all.”
Vineet Sukumar, Founder and Managing Director at Vivriti Capital, said,
We are proud of this collaboration with Axis Bank and GuarantCo as we will actively contribute to fostering economic growth and sustainability. This will fuel our efforts to expand our green portfolio in India’s e-mobility landscape as the government pursues the target of EV30@2030. Vivriti Group’s mission is to enable necessary debt finance to India’s mid-market ecosystem. We are not just building a business; we are building a world where financial success aligns seamlessly with environmental and social responsibility.”
About GuarantCo
GuarantCo mobilises private sector local currency investment for infrastructure projects and supports the development of financial markets in lower income countries across Africa and Asia. GuarantCo is part of the Private Infrastructure Development Group (PIDG) and is funded by the governments of the United Kingdom, Switzerland, Australia and Sweden, through the PIDG Trust, the Netherlands, through FMO and the PIDG Trust, France through a stand-by facility and Global Affairs Canada through a repayable facility. GuarantCo is rated AA- by Fitch and A1 by Moody’s. Since 2005, GuarantCo has enabling USD 6.2 billion of total investment and USD 5.2 billion of private sector investment, giving 45.2 million people improved access to infrastructure and creating around 229,000 jobs. GuarantCo’s activities are managed by GuarantCo Management Company which is part of Cardano Development www.guarantco.com
About PIDG
The Private Infrastructure Development Group (PIDG) is an innovative infrastructure project developer and investor which mobilises private investment in sustainable and inclusive infrastructure in sub-Saharan Africa and south and south-east Asia. PIDG investments promote socio-economic development within a just transition to net zero emissions, combat poverty and contribute to the Sustainable Development Goals (SDGs). PIDG delivers its ambition in line with its values of pioneering, partnership, safety, inclusivity and urgency.
PIDG offers Technical Assistance for upstream, early-stage activities and concessional capital; its project development arm – which includes InfraCo Africa and InfraCo Asia – invests in early-stage project development and project and corporate equity. PIDG credit solutions include EAIF (the Emerging Africa Infrastructure Fund), one of the first and more successful blended debt fund in low-income markets; GuarantCo, its guarantee arm that provides credit enhancement and local currency solutions to de-risk projects; and a growing portfolio of local credit enhancement facilities, which unlocks domestic institutional capital for infrastructure financing.
Since 2002, PIDG has supported 211 infrastructure projects to financial close, which provided an estimated 222 million people with access to new or improved infrastructure. PIDG is funded by the governments of the United Kingdom, the Netherlands, Switzerland, Australia, Sweden, Germany and the IFC. www.pidg.org
About Axis Bank
Axis Bank is one of the largest private sector banks in India. Axis Bank offers the entire spectrum of services to customer segments covering Large and Mid-Corporates, SME, Agriculture, and Retail Businesses. With its 5,152 domestic branches (including extension counters) and 15,806 ATMs across the country as on 30th September 2023. The network of Axis Bank spreads across 2,864 centres, enabling the Bank to reach out to a large cross-section of customers with an array of products and services. The Axis Group includes Axis Mutual Fund, Axis Securities Ltd., Axis Finance, Axis Trustee, Axis Capital, A.TReDS Ltd., Freecharge, Axis Pension Fund and Axis Bank Foundation. www.axisbank.com
About Vivriti Capital
Vivriti Capital is a fintech NBFC that aims to bring necessary debt finance to hundreds of mid-market enterprises across India. Vivriti Capital is part of the Vivriti Group that has, over the last 6.5 years, built a highly successful franchise, with INR 9,400 crores of portfolio as well as 300+ clients across 45+ sectors and 20+ states. Vivriti Group’s portfolio has witnessed stellar performance, with industry leading asset quality and return metrics. The Group has raised INR 1,400 crores of equity since inception. www.vivriticapital.com
