This transaction represents not only the inaugural Project Finance venture by a Japanese bank in India’s Electric Mobility sector but also marks SMBC’s debut Project Finance deal in E-Mobility across the Asia Pacific region.
GreenCell Mobility has successfully acquired a substantial financial investment of Rs 300 crore from Sumitomo Mitsui Banking Corporation (SMBC) to advance its Electric Bus initiative in Uttar Pradesh. This funding represents a significant milestone as it is the inaugural project finance venture by a Japanese bank in the electric mobility sector in India, and it also stands as SMBC’s first venture into E-Mobility project financing within the Asia Pacific region, according to a press release.
Under the agreement terms, SMBC has provided GreenCell Mobility with a long-term project finance facility to deploy 350 electric buses across Uttar Pradesh. This project operates under a decade-long concession agreement, ensuring a fixed payment per kilometre, which reduces traffic-related financial risks and secures a steady income flow that resembles an annuity setup.
The initiative is projected to substantially cut down carbon emissions, estimating a reduction of about 235,000 tonnes of CO2 over the duration of the contract. This reduction will be achieved by introducing 9-meter long fully built air-conditioned electric buses in eight major cities across Uttar Pradesh.
Devndra Chawla, Managing Director and CEO of GreenCell Mobility, expressed that this significant partnership with SMBC highlights GreenCell Mobility’s strong commitment to sustainable mass transit solutions. He proudly noted that GreenCell Mobility is the first company in India to receive green financing from prominent global banking institutions like Standard Chartered and Sumitomo Mitsui Banking Corporation.
Tomofumi Watanabe and Luca Tonello, co-general Managers of Structured Finance Asia Pacific at SMBC, conveyed their pride in pioneering this innovative financing deal with GreenCell Mobility, which underscores their dedication to promoting sustainable projects in India and throughout the Asia Pacific. They also mentioned that this transaction aligns with the principles of the Green Loan, setting a precedent in responsible financing and environmental care.
Additionally, Hiroyuki Mesaki, the Country Head of SMBC in India, stated their intent to utilize their financial expertise and international network to aid the shift toward cleaner transportation options, thus contributing to a more sustainable future.
