World Bank & SIDBI to provide $1 billion fund for EV financing

Date:

A $1 billion fund may soon be launched by the government in collaboration with the World Bank, and the Small Industries Development Bank of India (SIDBI). The fund will be used to provide guarantees against defaults on loans taken to buy electric two or three-wheelers.

Implementation

The NITI Aayog will be the facilitating agency of the project. It will aim to facilitate faster and easier financing of EVs. Initially a $300 million fund will be put in place as a “first loss risk sharing instrument.” The funds will be available to all financial institutions.

The instrument would act as a hedging mechanism, for banks to access in case of defaults of loans on purchase of electric vehicles. This is expected to bring down the cost of financing EVs by 10-12 per cent.

State Bank of India (SBI)

Currently, loans for electric two-wheelers and three-wheelers attract 20-25 per cent interest per annum. Earlier, the State Bank of India (SBI) was considered to be the programme lead. However, it withdrew from the deal after due diligence.

Banks have continued to stay cautious on financing EVs after losing money on e-rickshaws and other EVs powered by lead-acid batteries, ET added. Even as banks have maintained their distance from financing such vehicles, several NBFCs have come forward to take the role.

In FY23, EV sales in India are expected to cross a million units, an 84 per cent rise year-on-year.

━ related

Live Updates on RBI Monetary Policy: Key Decisions and Implications

Stay informed with live updates on the Reserve Bank of India's (RBI) monetary policy. This article provides real-time information on the central bank's policy decisions, including interest rates, liquidity measures, and other economic indicators, along with their potential impact on the Indian economy and financial markets.

Celebrating World Oceans Day 2023: Preserving Our Blue Planet

World Oceans Day 2023 is a global celebration that emphasizes the significance of our oceans and the urgent need to protect and preserve them. This year's theme highlights the crucial role of oceans in sustaining life on Earth and calls for collective action to address the environmental challenges they face.

Ukraine’s Nova Kakhovka Dam Disaster: Key Points on the Strategically Important Reservoir

The Nova Kakhovka Dam in Ukraine has recently experienced a disaster, highlighting the significance of this strategically important reservoir. Here are key points to understand the implications of the incident and its potential impact on Ukraine's water management, energy production, and regional stability.

World Bank Cuts India’s GDP Growth Forecast for FY24 to 6.3% While Raising Global Outlook

The World Bank has revised India's GDP growth forecast for the fiscal year 2023-2024, projecting a rate of 6.3%. This downward revision reflects the challenges faced by the Indian economy, while the global outlook has been revised upwards. The World Bank's assessment highlights the need for policy measures to address the factors impacting India's economic growth.

Tata Group Signs $1.6 Billion EV Battery Plant Deal in Gujarat

The Tata Group, a prominent conglomerate in India, has inked a significant deal worth $1.6 billion to establish an electric vehicle (EV) battery manufacturing plant in Gujarat. This strategic move reflects Tata's commitment to the development of sustainable mobility solutions and positions the company at the forefront of India's electric vehicle revolution.