The Eversource Capital electric bus subsidiary, GreenCell Mobility, has raised $89 million in mezzanine capital to grow its operations in India substantially. A group of well-known investors participated in the funding round, including the International Finance Corporation (IFC), British International Investment (BII), and Tata Capital. Through the application of mezzanine financing as a hybrid financial instrument that incorporates the characteristics of both debt and equity, GreenCell Mobility will have a chance to cultivate aggressive growth and fleet expansion without the urgent need to dilute equity.

Expansion and primary objective

The milestone comes as a continuation of a larger trend in the Indian automotive and transport sector, in which electric bus manufacturers and operators are appealing to institutional investors. The capital raise is the latest of a series of previous investments in the industry, such as the earlier mezzanine capital infusion by IFC of $37 million in GreenCell and a massive $100 million investment in JBM ECOLIFE with a view to rolling out electric buses and electric charging infrastructure in dozens of municipalities.

The core mission of this new finance is to support the growth of GreenCell Mobility’s current fleet to comprise 3,700 electric buses. The number of electric vehicles handled by the company is currently more than 1,200, and thus, this capital will facilitate an enormous increase in operational capacity 3-fold. This growth is not just quantitative but rather is associated with certain growth opportunities that are acquired by competitive auctions. The company has acquired rights over intra-city routes in some major regions in India, namely Delhi, Madhya Pradesh, Andhra Pradesh, Bihar, and the Union Territory of Puducherry.

Such operational successes were made possible by being involved in some of the key government programs, including the National E-Bus Program and the PM Seva E-Mobility program. The programs are aimed at modernizing the public transportation and lower carbon footprint of the Indian urban centers. GreenCell Mobility is making itself an important ally in the government’s quest to give millions of commuters in these areas clean, efficient, and reliable public transportation by adding thousands of new buses to these areas.

Investment and environmental benefits

The partnership of GreenCell Mobility and its shareholders serves as a reminder of the vital importance of private and institutional capital in the clean transport revolution. The investment can be regarded as a foundation of the urban transformation agenda in India. 

According to Katherine Koh, the Regional Industry Manager of Infrastructure and Natural Resources of IFC, the key to the modernization of the infrastructure of public transport is the electrification of bus fleets. The mezzanine investment shall improve the implementation of sustainable transport, particularly to the population of Tier II and III cities in India, so that the fruits of green technology are not concentrated only in the main metropolitan centers.

In addition to the environmental advantages of the reduction of tailpipe emissions, the increase in the fleet of GreenCell Mobility has a real effect on the economy. The implementation of thousands of new electric buses will provide many new jobs in manufacturing, maintenance, and operation.

The innovative financing and payment-security models are used to de-risk the industry, and this makes the sector more enticing as future private capital investments. This will enhance the economic growth of India, and it will lead the world in terms of financing the next generation of urban transport systems.

The wider market of motor mobility of electric in India is still on the rise, with other manufacturers acquiring considerable financing. The successful capital raise of GreenCell supports the sustainability of electric mass transport as a scalable business concept that is able to satisfy the two needs of environmental sustainability and commercial expansion.

Conclusion

The $89 million mezzanine capital raised by GreenCell Mobility is a significant step towards the electric vehicle ecosystem in India. Through the advocacy of such international and national financial organizations as IFC, BII, and Tata Capital, the company is highly positioned to achieve its bold objective to roll out 3,700 electric buses.

This growth will be able to reduce air pollution and offer more convenient transportation to thousands of passengers in different states and union territories. GreenCell Mobility keeps on incorporating its fleet into the national transport system with schemes such as the PM Seva E-Mobility program. It establishes a precedent of how institutional and private funders can collaborate to redefine urban mobility into a more eco-friendly future.