India
India’s transition to electric buses is critical for meeting its clean energy targets, requiring significant private investment to shift approximately 2.3 million diesel buses to electric. The Government of India has launched initiatives like the National Electric Bus Program (NEBP) in June 2022, aiming to deploy 50,000 e-buses by 2027, and the PM E-Bus Sewa Scheme in August 2023, targeting 10,000 e-buses in Tier 2 and Tier 3 cities. Convergence Energy Services Limited (CESL) leads these efforts in collaboration with State Transport Undertakings (STUs) and private operators. To address the financing challenges of e-bus deployment, CESL, in partnership with USAID’s South Asia Regional Energy Partnership (SAREP), hosted a stakeholder consultation in Mumbai on June 12th, 2024. The consultation, titled “Scaling Up Financing for E-Buses through Project Finance and Leasing Structures,” focused on exploring innovative financing solutions to support these ambitious goals.
The primary objective of the consultation was to explore and discuss viable financing structures that can facilitate the large-scale deployment of electric buses in India. Specifically, the discussions focused on project financing and leasing models, analyzing the associated requirements, risks, and potential solutions. The event aimed to foster a collaborative dialogue among stakeholders with the goal of integrating these financing options into existing frameworks and thereby accelerating India’s transition to electric buses.
Ms. Apurva Chaturvedi, Senior Clean Energy Specialist at USAID Indo-Pacific Office, outlined USAID SAREP’s vision of driving India’s clean energy transition through strategic private capital involvement and innovative financing mechanisms. She highlighted the essential role of such investments in achieving sustainable energy solutions and fostering regional cooperation for a greener future.
Mr. Vishal Kapoor, MD & CEO of CESL, provided context by highlighting the progress under NEBP and the necessity for robust financing structures to sustain momentum. He explained the limitations of balance sheet financing and the potential of project financing and leasing to overcome these challenges.
The consultation began with USAID SAREP leading a comprehensive exploration of e-bus financing, including requirements, considerations, and risk mitigation. A panel then discussed potential policy changes for project finance. The focus then shifted to international leasing models, informing a later discussion on introducing leasing structures in India.The final session explored the role of leasing in e-bus adoption, its implementation challenges, and integration with existing frameworks. Supportive policy mechanisms for leasing were consistently emphasized.
Mr. Rajneesh Rana, Head (Convergence), CESL, concluded the consultation with a call to action, stressing collaborative efforts in achieving India’s e-bus deployment targets. He thanked participants for their contributions and reiterated ongoing dialogue and collaboration for actionable solutions.
This consultation was a significant step in India’s move towards sustainable public transport. By engaging key stakeholders, the event identified ways to leverage project financing and leasing structures to expedite e-bus adoption, paving the way for a cleaner, greener future in India’s transportation sector.
