In a significant stride towards sustainable transportation, India’s ambitious plan to introduce 50,000 electric buses on its roads gains support from the United States. The collaboration involves a $390 million fund, acting as a guarantee for manufacturers seeking loans to expand electric bus production.
The payment security mechanism, backed by $150 million from the U.S. government and philanthropic groups, along with $240 million from the Indian government, marks a crucial step in building a robust financial system for electric mobility at scale in India. The fund aims to mitigate manufacturers’ risks as they pursue fresh investments in the burgeoning electric bus sector.
India, with only 12,000 electric buses currently in operation, has been actively working to drive down the price of electric buses. The introduction of the concept of “transportation as service,” wherein manufacturers rent buses to public entities and collect monthly payments for 12 years, played a role in spreading costs for local authorities. However, it led to a production lull as vehicle makers faced uncertain returns and associated long-term debt.
“This kind of thing is so exciting,” remarked U.S. climate envoy John Kerry. He emphasized the fund’s significance in achieving speed, scale, and impact in addressing the decarbonization challenge.
The new fund mechanism is poised to invigorate the electric mobility sector in India, aligning with the global push towards sustainable and environmentally friendly transportation solutions.
