Small Industries Development Bank of India (SIDBI) today announced Mission 50K-EV4ECO to strengthen the electric vehicle (EV) ecosystem including uptake for two-wheelers, three-wheelers, and four-wheelers through direct and indirect lending support for EV Companies.

Under the guidance of NITI Aayog, the Department of Financial Services (DFS), MoF (Ministry of Finance), and the government of India (GoI), SIDBI's Mission 50K-EV4ECO aims to provide better financing terms and understanding of other solutions needed to address the above issues.

This scheme is the precursor to the EVOLVE scheme by SIDBI-World Bank. The pilot scheme has two components- Direct lending and Indirect lending. Under direct lending, SIDBI will directly give loans to eligible MSMEs (including aggregators, fleet operators, and EV leasing companies) for the purchase of electric vehicles and the development of charging infrastructure, including battery swapping.

Sivasubramanian Ramann, CMD, SIDBI, sharing further details on the announcement, said that with 50K-EV4ECO they intend to promote the entire EV value chain. "This pilot shall be followed by scaling up support for the ecosystem through multilateral support. MSMEs, aggregators, and other crucial actors of the EV value chain have been facing challenges in convincing financial institutions to lend them."

SIDBI CMD, while acknowledging that channelising agencies are also facing speed bumps, said that NBFCs are playing an important role in the enterprise growth strategy of SIDBI. "They have shown willingness and ability to reach the bottom of the pyramid businesses, especially in credit deficient geographies, adoption of innovative and nimble credit delivery models and understanding of the local ecosystem."

He admitted that electric vehicle financing is predominantly being done by small, unrated NBFCs that have sector understanding and need to give the sector a developmental push, thus giving a fillip to the national agenda of becoming a carbon neutral nation”.

SIDBI's indirect scheme targeted at NBFCs (including small, unrated, focused, or emerging NBFCs actively engaged in EV financing) shall reach out to the last mile by inducing access to funds and also reducing landed costs, the press release noted.

Sudhendu Sinha, Adviser (Infra & e-mobility), NITI Aayog, said that SIDBI's footsteps will lead to India taking its EV journey rural. "This shall enable access to affordable financing for electric vehicles. We look at SIDBI to prioritise the 3-wheeler segment. I am sure these foot-on-the-ground pilots shall enable quick replicability and scalability through multilateral support. With a special scheme for NBFCs, I am confident that the mission shall kindle rural India to start its EV transition journey. “