This concerted push towards sustainability is poised to change the face of public transportation in the years to come
The effort will contribute to reducing greenhouse gas emissions.
India is working towards having 50,000 electric buses on its roads by 2027, thanks to a $390 million (around Rs. 3,254 crore) joint finance mechanism with the United States. Currently, India has only 12,000 operational e-buses. The fund will serve as an assurance for manufacturers seeking loans to increase production, officials from India and the US mentioned during a side event at COP28.
The payment security system was established with $240 million from the Indian government and $150 million from the US government and philanthropic organisations. It will serve as the foundation for risk management in India's widespread development of the financial system for electric mobility. Mahua Acharya, a government official leading the introduction of the first e-buses in the country, emphasised its critical role.
India previously introduced "transportation as a service to lower the cost of electric buses. “Under this model, manufacturers rent buses to public entities and collect monthly payments for 12 years. While this allowed local authorities to spread out costs and afford more buses, it led to a production lull as vehicle makers faced uncertain returns and long-term debt. The new fund mechanism aims to reduce manufacturers' risks when accessing finance for new investments.
US climate envoy John Kerry is excited about the joint finance mechanism, saying, "That is speed, scale and impact, and it is precisely what we need to do across every component of the [decarbonisation] challenge. “This collaboration between India and the US emphasises the commitment of the two nations to sustainable transportation solutions. The initiative is expected to contribute significantly to the global endeavour to reduce greenhouse gas emissions and transition towards a greener future.