Macquarie Group, one of the largest foreign infrastructure investors in India, is in talks with commercial investors to raise $205 million to set up an electric vehicle (EV) leasing and finance company, said two people aware of the development.
The India-focused e-mobility financing platform will be managed by Macquarie Asset Management, which has assets of around $A773.1 billion under management. It will work on reducing the upfront capital expenditure needed for the push towards green mobility. As part of its plan, Macquarie, which has secured $200 million in commitments from South Korea’s Green Climate Fund, will start with the e-mobility financing platform for e-buses, shared fleets and EV charging infrastructure.
“Macquarie aims to raise a further $205 million from institutional investors to capitalize the platform and, over time, the platform hopes to mobilise about $1.5 billion of capital (including debt finance)," according to Macquarie’s website.
This comes in the backdrop of state-run Convergence Energy Services Ltd (CESL) announcing the price discovered in a tender for 5,540 electric buses for five cities--the lowest ever, and almost on a par with the operational costs of diesel buses. In what may help expedite India’s ambitious plans for green mobility, EV prices are soon expected to be on a par with internal combustion engine (ICE) vehicles.
“Macquarie is leading the development of a blended finance platform, with UN’s Green Climate Fund (GCF), to drive the adoption of EVs across India, helping reduce the country’s CO2 emissions and improve urban air quality," according to Macquarie.
Macquarie and its managed funds oversee investments across 12.4GW of green energy capacity and have so far invested $2.5 billion in India.
A spokesperson for Macquarie declined to comment on the specific query about the ongoing talks to raise capital.
Energy Efficiency Services Ltd (EESL) is running the government’s ambitious Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME 2) scheme for e-three-wheelers and e-buses. The money will be spent on subsidizing 500,000 electric three-wheelers, 1 million e-two-wheelers, 55,000 electric passenger vehicles and 7,090 e-buses.
“Initially, the platform will focus on selected segments of the EV ecosystem such as e-buses, shared fleets and charging infrastructure, and will expand into other e-mobility sub-sectors as the market scales. In doing so, the platform also aims to contribute to an enabling environment for EV growth, leading to increased penetration of EVs and new market participants, including the growth of financing solutions and domestic manufacturing, and contributing to decreasing air pollution in urban environments," Macquarie said on its website. “With a 10-year implementation period, the platform is expected to deliver lifetime reduction of ~9.5 MtCO2e of greenhouse gas emissions."