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The procurement of 5,110 electric vehicles is expected to result from this transaction to enter the supply side of India’s e-mobility sector for the benefit of consumers.
| Company | GuarantCo |
| Sector | Transportation |
| Country | India |
| Total Project Cost | USD 15m |
| PIDG Commitment |
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| Dates of PIDG involvement |
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Electric Vehicle (EV) adoption in India is crucial to addressing several challenges including urban air pollution, but engagement has so far been constrained (less than 1 per cent penetration) due to mutually reinforcing barriers on demand and supply sides, as well as in financing.
PIDG provided a 50 per cent on-demand credit guarantee to Axis Bank to extend a c. USD 30 million three-year loan to Vivriti Capital, a Non-Bank Financial Company (NBFC) that aims to bring debt finance to mid-market enterprises across India. Vivriti works across various sectors and serves ride hailing companies such as Uber and Ola through its car fleet management.
The proceeds of the loan will help Vivriti to expand its lending portfolio of three and four-wheeler EV providers and charging station operators.
This is the first guarantee provided under the framework guarantee agreement signed by PIDG and Axis Bank allowing mobilisation of funds of USD 300-400 million to finance India’s e-mobility sector.
The procurement of 5,110 electric vehicles is expected to result from this transaction to enter the supply side of India’s e-mobility sector for the benefit of consumers.
Up to 665 jobs are estimated to be created through this transaction, 30 per cent of which will be held by women.
The project aims to support the uptake of EVs in India through access to finance for EVs, associated infrastructure and manufacturing facilities. This will enable emission reductions, increasing over time as more renewable energy is integrated into the grid.
The perceived nascency around EVs in India means that it is currently deemed as high risk for financial institutions, leading to high interest rates and low loan-to-value ratios. Banks make up 56 per cent of the market but are not comfortable lending to small to mid-market EV enterprises (such as small charging stations, battery swaps players and other support services etc.) due to the small ticket size and lack of vintage. This, and the upfront capital closes of EVs to consumers makes this a difficult commercial proposition, marking the market as highly underdeveloped. This transaction demonstrates the potential risk-adjusted returns of EV finance to inspire replication.
