In December 2019, OeEB signed a long-term loan of USD 20 million to the Indian commercial vehicle financing provider Shriram Transport Finance Company Limited. The funds are used to finance natural gas and electric vehicles for private micro and small businesses.
|Project name||Shriram Transport Finance Company Ltd.|
Southern and Eastern Asia
Financial sector / Microfinance / SME
|OeEB project volume||
USD 20 million
|Project partner(s)||Shriram Transport Finance Company Ltd.|
India is the fourth largest greenhouse gas emitter worldwide, with the transportation sector – above all road transport – making the third largest contribution to the country's greenhouse gas emissions. Vehicle emissions have contributed significantly to making India one of the countries with the poorest air quality in the world. At the same time, the number of vehicles in the country is expected to double by 2040. According to plans by the Indian government, the proportion of natural gas (CNG-Compressed Natural Gas) and electric vehicles, which cause significantly lower greenhouse gas emissions as compared to other forms of propulsion such as gasoline or diesel, is to be greatly expanded.
As a financing provider for used and new commercial vehicles, Shriram Transport primarily targets small truck owners, which make up the largest share of road freight transport in India, but whose development is severely limited by low means of access to formal financial services for investments. Shriram Transport's goal is to accompany its customers on their way out of poverty into self-employment and towards operating small and medium-sized businesses – from the driver to the owner of a used vehicle to the owner of a new vehicle and finally to being the fleet operator.
OeEB's long-term credit line enables Shriram Transport to expand its range of financing for natural gas and electric vehicles for private micro and small businesses. This not only contributes to environmental protection through mitigation of emissions, but above all to the well-being of the population by reducing air pollution.