Mytrah Mobility bags $1 billion from UN-backed GCF for electric buses

Mytrah Mobility, the electric vehicle (EV) solutions firm based in Gurugram, will be implementing the largest of its kind funding programme for electric buses and allied infrastructure in India. The UN-backed Green Climate Fund (GCF) will be channelising funds worth $1 billion through the company. 

Mytrah estimates the funding will enable financing of 5,000 buses. It will have the potential to reduce 12 million tonnes of greenhouse gas emissions, avoid use of 1.5 billion litres of diesel and create over 20,000 skilled green jobs.

The Indian e-bus market is expanding rapidly with cities introducing large programmes on a per-kilometre model. New Delhi is expected to come out with a tender for 1,000 e-buses this month. The Delhi Metro Rail Corporation (DMRC) has invited bids for 200 e-buses for its feeder service. 

“In India, we are looking for a full solution when it comes to e-buses. So, it is either the full life-cycle cost or a per-metre cost of the vehicle that is taken into account,” said Ankit Singhvi, co-founder and chief executive at Mytrah.  

The GCF provides long-term low-cost (10-15 years) financing, which is crucial for competitive deployment of electric buses, given their higher upfront capital expenditure. 

This programme is expected to benefit operators and original equipment manufacturers (OEMs) that are looking to deploy e-buses in India. 

“This is very timely for India, as the government has set ambitious targets on EV adoption. With the market decisively shifted to a solution model, optimal financing solutions for e-buses are required for them to compete with diesel and CNG buses. We look forward to take on board public and private operators, aggregators, OEMs and charging infrastructure firms to make EVs viable,” said Singhvi. 

The company bagged the GCF funding through a three-stage bidding process. Mytrah will be availing the funding through Small Industries Development Bank of India, the accredited agency from India. “Most people who run such buses are small and medium enterprises. Buses usually get a five-year loan, which works out costly for the electric ones. Through subordinate lending facility like this, longer tenor loan is possible,” he said.

Compared to CNG and diesel buses, the operating cost is less for e-buses. The capital cost, however, is higher. At present, it is estimated there are about 80,000 e-buses in India. Mytrah plans to finance 1,200 buses in the first year, followed by 1,500 the next year and then the rest. “This is a big piece, especially in this environment when banks are not willing to lend. This (the financing) will be a catalyst,” said Singhvi.

Interest rates on commercial vehicles are lower than home loans. “The GCF allows a 15-year term loan. We will customise it according to the end user's requirements, since we have the flexibility for making the funding viable,” he said.

According to Singhvi, his firm pioneered the introduction of e-buses in India, with the first commercial deployment of 25 buses at Manali on the Rohtang route in a consortium in 2016. It also pioneered the first private contract for e-bus deployment at the Delhi airport.