CESL to Empanel Financial Institutions to Provide Loans for Electric Vehicles

Convergence Energy Services Limited (CESL), a wholly-owned subsidiary of the Energy Efficiency Services Limited (EESL), has invited expressions of interest to empanel financial institutions for financing electric vehicles (EVs) across India.

The last date to submit the bids is November 10, 2021, and the bids will be opened on the same day. The pre-bid meeting will be held on October 27.

The successful bidder will have to furnish an amount of ₹500,000 (~$6,669) as a bank guarantee within 28 days of receiving the empanelment letter from CESL.

In June, the Department of Heavy Industries announced a specific demand incentive for electric two-wheelers (E2W) of ₹15,000 (~$205)/kWh with a cap on the incentive of 40% of the total cost of the vehicles. Energy Efficiency Services Limited (EESL) was responsible for implementing the program and aggregating demand for 300,000 electric three-wheelers (e-rickshaws) for multiple user segments. EESL is also aggregating the demand in the nine cities for electric buses under the operating expenses (OPEX) model.


CESL is managing the solar and mobility portfolios of EESL. The EoI is for the empanelment of financial institutions to finance EVs facilitated by CESL in partnership with the state governments across India.

The eligible and qualified financial institutions will be empaneled with CESL to provide the user with a financing solution for their chosen EV.

The financial institution should disburse a minimum of 80% of the invoiced vehicle value as a loan amount. The financing tenor to be provided by the financing institution will be a minimum of 24 months and a maximum of 60 months. The maximum cost of debt should not be greater than 20% for any borrower for any tenor.

To participate in the bidding process, the financial institution should be a scheduled commercial bank or public financial institution registered under the Companies Act, 1956, or a non-banking financial company with a registration certificate from the Reserve Bank of India. The bidding institutions should have experience in financing vehicles or EVs in the transport or auto sector for a minimum of five years. The institution should be a member of credit information companies like CIBIL, Equifax, Experian, and CRIF High Mark.

The average annual turnover of the financial institution should be at least ₹50 million (~$666,907) in the last three financial years. For the previous three financial years, the average assets under management should be at least ₹100 million (~$1.33 million). The net worth of the bidder should not be less than 100% of the paid-up share capital. Also, the financial institution should not have suffered any financial loss in any two of the last three financial years.

CESL has stated that 25% of the tendered quantity has been reserved for micro and small enterprise (MSE) suppliers. Out of the 25% amount tendered reserved for MSE suppliers, 4% has been earmarked for procurement by MSEs owned by Scheduled Caste and Scheduled Tribe entrepreneurs, and 3% has been reserved for women-owned MSEs.

If the MSE vendor participating in the tender quotes within the price band of lowest (L1) + 15%, he will be allowed to supply 25% of the requirement subject to the acceptance of the L1 price.

Last month, CESL invited original equipment manufacturers to empanel for supplying electric two-wheelers in Andhra Pradesh.

Earlier, CESL had invited e-bids for the empanelment of an independent third-party validation and verification agency for its EV charging infrastructure project.

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