Centre weighs cheaper loans for pvt e-buses

As private electric bus operators struggle to secure affordable credit, the government is working on a new financing scheme to lower their borrowing costs by routing funds through the Small Industries Development Bank of India (SIDBI) and the National Bank for Agriculture and Rural Devel- ’opment (NABARD), according to two government officials aware of the development.

- Manas Pimpalkhare & Rituraj Baruah

The development comes amid heightened lender caution over the electric vehicle (EV) industry for the past one year, following the collapse of electric cab company BluSmart.

‘As per the officials, the scheme is being finalized by the heavy industries ministry and is likely to be rolled out in the next 6-12 months. It seeks to address one of the key bottlenecks in India’s e-bus transition: the high cost of capital for private operators, who run nearly 90% of the country’s 2 million buses.

According to the officials, the scheme aims to accelerate the shift from diesel to electric fleets by channelling lower-cost, longer-tenor funds to non-banking finance companies (NBFCs) through SIDBI and NABARD, a move which will reduce EMIs, extend repayment periods, improve margins and risk-adjusted returns for operators.

E-buses cost two-and-a-half to three times more than diesel