Shell Foundation To Cover Half Of SIDBI’s $6 Mn Commercial EV Loan Plan

New Delhi, Oct 6 (KNN) Small Industries Development Bank of India (SIDBI), and the UK-headquartered Shell Foundation, an initiative of the oil major Royal Dutch Shell on Thursday announced their partnership to launch Risk Sharing Facility (RSF) to support India’s EV Mission 30@30.

This will be implemented through SIDBI’s mission of enabling ecosystem to foster 50,000 EVs. EV Mission 30@30 aims for 30% EV penetration by 2030 in India.

The USD 6 million initiative including USD 3 million from SIDBI and USD 3 million from Shell Foundation will provide a partial credit guarantee to borrowers who use electric two and three-wheelers for commercial use. 

The agreed cap is 7.5% of the second loss layer, which will unlock approximately USD 81 million of commercial capital for EV asset financing, said SIDBI in a statement.

Sivasubramanian Ramann, CMD, SIDBI said “In line with the national mission of EV30@30 SIDBI has adopted EV as a 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 lenders, operating in emerging and underserved segments.”

“Two development institutions, SIDBI and Shell Foundation, have come together to be the first mover and change maker for the commercial EV market. We expect that the Risk-sharing facility for EVs will address the lack of access and affordability of commercial financing due to actual and perceived risks associated with EV Lending,” Ramann added.

As per the release, the risk-sharing facility shall be followed by scaling up support to the ecosystem from multilateral support for the EVOLVE programme. 

Jonathan Berman, CEO of Shell Foundation said, “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%.”  (KNN Bureau)