GreenCell Mobility secures INR 3 Billion Green Financing from Sumitomo Mitsui Banking Corporation for 350 electric buses in Uttar Pradesh

by Priya Jadhav

1st project in Electric Mobility space in India to be financed by a Japanese bank

1^st project of Sumitomo Mitsui Banking Corporation in E-mobility space in Asia-Pacific

Mumbai, May 2024: GreenCell Mobility, a pioneer in Electric Mass Mobility sector, has secured Green Financing from leading Japanese financial institution Sumitomo Mitsui Banking Corporation (SMBC) for its transformative Electric Bus project in Uttar Pradesh. This transaction not only marks the 1^st Project Finance by a Japanese bank in the Electric Mobility domain in India but is also SMBC's 1^st Project Finance transaction in E-Mobility in Asia Pacific.

According to the terms of the agreement, SMBC has extended a long-term Project Finance facility to GreenCell Mobility for its 350 Electric Buses project in Uttar Pradesh. This INR 3.07 billion Project Finance facility represents a pivotal step in both low carbon transportation and financial innovation in India. The project is expected to reduce approximately 2.35 lakh tonnes of gross CO2 emissions over its contract lifespan, by facilitating the deployment of 9 metres fully built pure AC Electric Buses across 8 cities in Uttar Pradesh.

Devndra Chawla, MD & CEO of GreenCell Mobility, commented, "Our historic partnership with Sumitomo Mitsui Banking Corporation demonstrates GreenCell Mobility’s unwavering dedication towards sustainable mass mobility. The Green Financing is a significant milestone to step up our efforts towards transforming India's electric transportation landscape. GreenCell Mobility has become the first Indian company to secure Green Financing from global banks Standard Chartered and Sumitomo Mitsui Banking Corporation."

The Project Finance facility will help with the procurement, operation, and maintenance of electric buses under the FAME II Scheme, which is administered by the Uttar Pradesh government's Directorate of Urban Transport. Operating under a 10-year concession agreement, the project guarantees a fixed per-kilometer fee, mitigating traffic risk and ensuring a consistent revenue stream similar to an annuity.

Tomofumi Watanabe and Luca Tonello, co-General Managers of Structured Finance Asia Pacific at Sumitomo Mitsui Banking Corporation, stated, "We are proud to facilitate this groundbreaking financing deal with GreenCell Mobility, further reinforcing our commitment to advancing sustainable initiatives in India and the Asia Pacific region. By aligning the transaction with the Green Loan Principles, we are setting new benchmarks for responsible financing and environmental stewardship."

Commenting on the transaction, Mr. Hiroyuki Mesaki, Country Head of SMBC India, stated "We are excited to initiate our journey into India's e-mobility sector through our collaboration with GreenCell Mobility. This transaction exemplifies our dedication to fostering sustainable practices and underscores our commitment to supporting innovative projects that drive positive environmental impact. By leveraging our financial expertise and global network, we aim to help the transition towards cleaner transportation solutions, paving the way for a more sustainable future"