Small Industries Development Bank of India (SIDBI) and Shell Foundation, the UK foundation that catalyses clean energy innovation in Africa and India, on Thursday announced the launch of a Risk Sharing Facility (RSF) to complement EV Mission 30@30 through SIDBI’s mission of enabling an eco system to foster 50,000 EVs.
This will improve access to finance and ramp-up the adoption of electric two- and three-wheelers across India.
The $6m ($3m SIDBI + $3m Shell Foundation) will provide partial credit guarantee to electric vehicle (EV) eco-system players who support EVs for commercial use. The agreed cap is 7.5% of second loss layer that will unlock approximately $81m of commercial capital for EV asset financing.
SIDBI has been conceptualising EV risk sharing facility/financial products via the support of multilaterals after discussing with key stakeholders. While EVOLVE is under consideration but in order to get going, SIDBI has commenced 50KEV4ECO programme from April 2nd, 2023.
SIDBI is operating two schemes – one for focussed NBFCs operating in EV space and other for EV value chain players and MSMEs. To further strengthen the confidence, SIDBI in partnership with Shell Foundation, is introducing the pilot risk sharing program.
Shri Sivasubramanian Ramann, CMD, SIDBI said in a statement, “In line with national mission of EV30@30, SIDBI has adopted EV as thrust segment. By launching mission 50K- EV4ECO we are promoting the entire EV value chain. We have witnessed that RSF is an important instrument to provide initial comfort to the lenders operating in emerging and unserved or underserved segments. We expect that the Risk sharing facility for EV will address the lack of access and affordability of commercial financing due to actual and perceived risks associated with EV lending.”
Shri Sudhendu J. Sinha, Adviser (Infra & e-mobility), NITI Aayog said “This pilot RSF initiative will further strengthen our resolve to move the EV ecosystem upward. It will also enable picking up of learning threads and weave the scaling up EV RSF version under bigger and broader multilateral institutional support. It is expected that commercial banks and NBFCs will speed up financing EV assets for commercial use. This would address the challenges of access to affordable finance.”
Jonathan Berman, CEO of Shell Foundation said, “This partnership with SIDBI is directly aligned with our mission to empower five million urban transporters to earn a living income by transitioning to electric mobility by 2032. The creation and launch of RSF facility will stimulate the EV Financing sector for 2W & 3W which are used as income generating assets. This will scale access to two- and three-wheeler electric vehicles for 50,000 urban transporters and empower them to increase their incomes by up to 70%.”
