International Finance Corporation IFC, a member of the World Bank Group, will invest 600 crore in Mahindra and Mahindra's wholly-owned subsidiary, a last mile mobility company. The investment comes as IFC tries to scale up affordable electric three-wheelers and small commercial vehicles.
IFC focuses on the private sector in emerging markets to create markets and opportunities in developing countries. The investment will lead to the seamless transition from fossil fuel to electric vehicles in the auto industry, as well as boost income for microentrepreneurs in India.
The investment will be made up of compulsory convertible instruments at a value of up to Rs 6,020 crore. The investment will result in an ownership of between 9.97 -- 13.64 per cent for IFC in Mahindra s NewCo.
The investment of NewCo will enable the development and manufacturing of new generation products in the electric mobility space, as well as three wheelers Alfa, Treo, Zor and four-wheeler SCV Jeeto IFC's investment will help scale up e-mobility in the last mile connectivity space.
Anish Shah, MD CEO, Mahindra Mahindra, said: "We are delighted to have IFC as a partner in our last mile mobility journey. Decarbonizing the transport sector is essential to achieving the climate goals that India has set for herself. IFC, with its focus on sustainability and boosting prosperity, is an ideal partner for us. Hector Gomez Ang, IFC's Regional Director for South Asia, said that With transport being the fastest-growing contributor to climate change, it is no longer a question whether electric vehicles should be adopted at scale, but rather how quickly. The companies said in a joint statement that decarbonising the transport sector that contributes about 13 per cent of the country's greenhouse-gas emissions can reduce the impacts of GHG emissions. They said that while growing e-commerce activity and urbanisation can lead an increase in last mile transportation, electric vehicles and lead the sector s clean energy transition.
In fiscal year 2033, IFC, which works in over 100 countries, committed $32.8 billion to private companies and financial institutions in developing countries.