The climate mitigation guarantee will be utilised to accelerate the Electric Vehicle (EV) eco-system in India through capex financing of a wide range of entities engaged in manufacturing, distribution and servicing of electric vehicles, batteries and charging infrastructure.

This guarantee-backed debt funding is a first of its kind initiative in India which is expected to accelerate the development of the EV ecosystem in the country. Each qualified loan made by Axis Bank to the underlying borrowers will be partially credit guaranteed with a maximum tenure of up to 10 years. Loan proceeds within the framework agreement will be used for greenfield capital expenditure in EV infrastructure.

The transaction is Paris-aligned and will contribute to SDG 13 (Climate Mitigation) and SDG 11 (Make cities inclusive, safe, resilient and sustainable) and reduction of emissions and improving of air quality SDG 9 as well (Build resilient infrastructure, promote inclusive and sustainable industrialisation and foster innovation). EV adoption in India is crucial to addressing multiple challenges, including urban air pollution but the progress has hitherto been constrained, with less than 1 percent penetration by a range of other factors including lack of financing.

The agreement can help improve the efficiency of the EV infrastructure sector by supporting the entry and expansion of private sector players into the market and the introduction of innovative technology.