ResponsAbility fund invests in Indian EV financing company #IndiaFinance

The fund managed by the Swiss impact investor focuses on projects in emerging and developing countries committed to slashing greenhouse gas emissions by at least one-fifth.

A climate fund managed by Zurich-based impact asset manager responsAbility has invested $10m (€9.5m) in WheelsEMI, an Indian firm that specialises in financing new and used two-wheelers, including electric vehicles. No financial details were disclosed.

The commitment by the Global Climate Partnership Fund (GCPF) allows WheelsEMI to expand financing for electric two- and three-wheelers and support the expansion of clean mobility in India, which was ranked the third-most polluted country in the world in 2023, according to AQI, a Swiss air quality monitoring group.

Founded in 2017, with a head office in Pune, in the west-central Indian state of Maharashtra, WheelsEMI’s growing portfolio of loans for electric two- and three-wheelers means it is “well-positioned” to take advantage of India’s transition to sustainable mobility, according to responsAbility.

“WheelsEMI is a pioneer in India’s EV financing sector, providing underserved communities with access to clean mobility,” said Natasha Hinduja, investment analyst at responsAbility. “This investment underscores our commitment to climate action and sustainable economic growth in emerging markets.”

The investment “supports the reduction of greenhouse gas emissions and advances clean mobility solutions in emerging markets, which are key objectives of GCPF’s climate finance efforts”, responsAbility company spokesman Richard Rogers told Impact Investor.

Favourable government policies

The growth of electric vehicles in India is aided by expanding infrastructure for charging stations, increasing popularity among consumers and favourable government policies, according to responsAbility.

“This investment enhances our ability to make electric mobility more accessible across India,” said Karunakaran Vadakkepat, co-founder and joint managing director at WheelsEMI. “With responsAbility’s support, we will enter new markets, expand our partnerships with EV manufacturers, and provide financing solutions that drive the country’s sustainable transport sector forward.”

Since its foundation in 2003, responsAbility has invested $16.3bn (€15.5bn) in impact investments across three themes: financial inclusion, climate finance and sustainable food. It managed $5.4bn in assets across 300 portfolio companies in around 70 countries at the end of last year.

Its climate fund, a public-private partnership focused on financing energy efficiency and renewable energy projects in emerging and developing countries, has capital commitments from investors of $700m.

“Regarding climate finance, responsAbility invests in ways that directly contribute to mitigating climate change, support adaptation to climate change, and drive sustainable development,” Rogers said.

This includes direct investments into renewable energy projects, implementing green lending programmes in local banks, and investing in energy efficiency projects that offer significant energy savings, he added.

In January, as reported by Impact Investor, the firm announced it had raised an additional $150m in a third close of its Asia climate strategy, taking the total commitment to more than $350m.