SIDBI Unveils New Report To Boost EV Financing In India

New Delhi, Mar 22 (KNN) Small Industries Development Bank of India (SIDBI), with guidance from NITI Aayog and support from RMI and the World Bank, has released a report highlighting strategies to boost financing for electric two- and three-wheelers in India.

The report, titled "De-Risking Lending for a Brisk EV Uptake," was launched at the Transforming Transportation 2024 International Conference in Washington, D.C.

It details six de-risking measures to mitigate risks for investors in the electric vehicle (EV) ecosystem.

The proposed measures fall under three pillars: tailored financial products for e-2/3Ws, standardised eligibility criteria for OEMs and financiers, and institutionalisation of de-risking measures (DRMs).

Two sets of de-risking measures are highlighted, each tailored to reduce risk and enhance market confidence in the EV segment.

The first set of measures focuses on general strategies such as comprehensive collections systems with digital and cash payments, robust repossession mechanisms, and encouraging comprehensive EV-specific insurance. These measures aim to streamline operations and minimise potential losses for financiers.

The second set of measures, tailored specifically for the EV market, includes leveraging telematics data, developing secondary sales markets, and bolstering product quality assurance. By harnessing technology and fostering market growth, these measures aim to enhance transparency and mitigate anticipated risks in the e-2/3W segment.

Drawing insights from interactions with over 1000 stakeholders, SIDBI's report brings forth actionable solutions to address industry pain points and convert challenges into opportunities. 

SIDBI Chairman Sivasubramanian Ramann stated the bank's commitment to scaling the e-2/3W market through initiatives like Mission 50K-EV4ECO, offering loans to NBFCs and MSMEs for EV adoption and charging infrastructure.

RMI India's Akshima Ghate highlighted the potential for de-risking measures to enhance lending terms, reducing the current 5-14 per cent premium on EV loans compared to ICE counterparts.

The World Bank's Gerald Ollivier emphasised the collaboration with the Indian government to establish a sustainable EV financing ecosystem through financial products and de-risking measures.

SIDBI plans to leverage its learnings to shape risk mitigation models for electric four-wheelers, buses, trucks, and other emerging EV segments, promoting sustainable growth of the EV ecosystem in India.

(KNN Bureau)