BL interview. Financing e-buses will need ₹25,000 crore: Former CEO, CESL

Electric mobility is the way to go and India has made huge strides. No doubt about that. Customers are curious, early adopters are addicted, and subscribers waiting in line. I think the biggest developments have been with regard to two-wheelers and buses. With cars, I am looking forward to many more models where consumers can make real and proper choices. Chargers need to be omnipresent. 

The biggest agenda item with regard to electric mobility is public transport - buses and last mile connectivity. Electric buses are heavy on capital investment. So, the next big chapter to work on is finance. How to finance contracts with state transport corporations (STCs)? Until our STCs are credible on payments, what structures will help mitigate risk and enable banks to step in? We have aggregated demand for 25,000 buses, of which almost 17,000 have been tendered for, and almost 12,000 in different stages of contracting. Financing this is at least 25,000 crores - not a small amount.   

The second big agenda item is enhancing the capacity of our STCs. They need a different work program, reskilling programs, more technology, modernised systems, and revised performance targets. STCs should focus on transitioning away from owning buses to delivering mobility, whilst upgrading its workforce and managing employment. The transition must include women. 

So, I think the immediate road ahead is to focus on these two things.  

Yes, the Government is working on developing a domestic emissions trading scheme. To make it functional, we will need to create demand.  

At CESL, we started a carbon finance-based project called Gram Ujala where high quality LEDs are given to rural homes at a serious discount, and the program made possible through carbon revenues. Carbon credits for this project will be issued very soon. I hope that experience with this pilot engagement in five states can come in useful. 

The international carbon market, where I have spent almost two decades in, is putting a premium on high quality credits. I think that areas, such as land use management, agriculture, forestry, and so on, where social benefits are high, will be key. I hope we can design large scale programs here and use carbon finance to enable change. In doing this, we must learn from the 20+ years of international experience with emissions trading schemes. 

I would count the e-Bus program in the top here. And I give this top spot for three reasons: 1) electric buses are now cheaper than managing diesel buses, 2) there is no upfront cost to STCs and a good PPP structure appears to have been enabled, and 3) we did this as a team with States and Ministries alike. We were fortunate to have the collaboration of so many states - Delhi, Haryana, Kerala, Gujarat, Telangana, Karnataka, West Bengal, and Arunachal Pradesh; and I was privileged to have the leadership from CEO NITI and the goodwill of so many Ministries and their Secretaries.  

I came into this role to attempt large scale impact. I leave with the conviction that it is entirely possible to see large scale change in India. I am very happy about that.