Axis Bank and GuarantCo, through PIDG, Announce Guarantee Platform with a Programme Size of USD 300 Million to Accelerate Transition to Electric Vehicle Eco-system in India
Mumbai, Maharashtra, India: 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 (INR equivalent) 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).
About Axis Bank: Axis Bank is the third largest private sector bank in India. Axis Bank offers the entire spectrum of services to customer segments covering Large and Mid-Corporates, SME, Agriculture and Retail Businesses. With its 4,679 domestic branches (including extension counters) and 10,970 ATMs across the country as on 30th September 2021, the network of Axis Bank spreads across 2,658 centers, enabling the Bank to reach out to a large cross-section of customers with an array of products and services. The Axis Group includes Axis Mutual Fund, Axis Securities Ltd., Axis Finance, Axis Trustee, Axis Capital, A.TReDS Ltd., Freecharge and Axis Bank Foundation.
About GuarantCo: GuarantCo mobilises private sector local currency investment for infrastructure projects and supports the development of financial markets in lower income countries across Africa and Asia. GuarantCo is part of the Private Infrastructure Development Group (PIDG) and is funded by the governments of the United Kingdom, Switzerland, Australia and Sweden, through the PIDG Trust, the Netherlands, through FMO and the PIDG Trust, France through a stand-by facility and Global Affairs Canada through a repayable facility. GuarantCo is rated AA – by Fitch and A1 by Moody’s. GuarantCo’s activities are managed by GuarantCo Management Company which is part of Cardano Development.http://www.guarantco.com.
About PIDG: The Private Infrastructure Development Group (PIDG) is an innovative infrastructure development and finance organisation which encourages and mobilises private investment in pioneering infrastructure in the frontier markets of sub-Saharan Africa and south and south-east Asia to promote economic development and combat poverty. PIDG delivers its ambition in line with its values of opportunity, accountability, safety, integrity and impact. Since 2002, PIDG has supported 157 infrastructure projects to financial close and provided 209 million people with access to new or improved infrastructure. PIDG is funded by six governments (the United Kingdom, the Netherlands, Switzerland, Australia, Sweden, Germany) and the IFC. http://www.pidg.org