November 11, 2021
Axis Bank, India’s third largest private sector bank and The Private Infrastructure Development Group (PIDG) guarantee arm, GuarantCo, have announced the partnership and intent to execute an umbrella guarantee framework of USD 200 million with a programme size of USD 300 million towards accelerating the E-Mobility eco-system in India.
The programme was announced during COP26 in Glasgow, which was also announced by the UK Prime Minister as part of the UK Clean and Green Initiative.
The framework covering the scope of the Electric Vehicle (EV) guarantee in India and the relevance of this partnership was jointly announced by Amitabh Chaudhry, MD & CEO, Axis Bank, Philippe Valahu, CEO, PIDG and Yukiko Omura, Chair of the Board of GuarantCo and PIDG Board member. The definitive documents, subject to internal and regulatory approvals, are expected to be formally signed by the end of 2021.
The programme includes Capex financing for a wide range of entities engaged in the manufacturing, distribution or servicing of electric vehicles, batteries, components and charging infrastructure. The ramp-up period of the programme will be two years from the date of signing.
Speaking on the occasion, Amitabh Chaudhry, MD & CEO, Axis Bank said: “As a responsible financial institution, we would like to reinforce our commitment towards achieving the Sustainable Development Goals, thereby creating a more inclusive, equitable economy and a healthier planet. Our partnership with GuarantCo in supporting the E-Mobility sector of the country is an important milestone in our ESG journey. It will act as a significant force multiplier for India’s EV sector, which is expected to cross over 6 million units annually within the next decade.”
Philippe Valahu, CEO, PIDG said: “We are very excited about this partnership with Axis Bank and the potential for expansion into this important sector. Investments in the electric mobility market will be vital to help meet the challenging climate targets in the years to come and we are looking forward to working together.”
Emily Bushby, Interim CEO, GuarantCo said: “GuarantCo is delighted to enter into a partnership with Axis Bank to support the EV ecosystem in India. It will be our first transaction in this important sector which could have significant positive impact on climate and general improvement of human life. This project would be catalytic in pushing E-Mobility solution in India thereby supporting PIDG and GuarantCo’s aim to build their climate mitigation and adaptation portfolio.”
Subject to necessary approvals from, and agreement on final terms by, both Axis Bank and GuarantCo, this framework guarantee agreement supports Axis Bank’s commitment of incremental financing of Rs. 30,000 Crores under Wholesale Banking to sectors with positive social and environmental outcomes by FY 2026. In addition, the Bank has also committed to making 5 percent of its two-wheeler loan portfolio electric by FY 2024 as part of its larger commitments towards positive climate action and the Sustainable Development Goals (Press Release).