Ola Electric Mobility and Bank of Baroda have signed one of the largest long-term debt financing agreements in the Indian electric vehicle (EV) industry. The ten-year debt of $100 million will be used for the financial closure of Phase-1 of Ola Futurefactory – Ola’s global manufacturing hub for its electric two-wheelers.

In December 2020, the company declared that it would be investing ₹24 billion (~$322 million) to set up Phase 1 of the factory. At full capacity of 10 million vehicles annually, the Ola Futurefactory to be set up on a 500-acre site in Tamil Nadu is slated to become the world’s largest two-wheeler factory.

The factory will generate nearly 10,000 jobs. It will serve as Ola’s global manufacturing hub catering to its customers in India and key markets across Europe, the UK, Latin America, Australia, and New Zealand. Once the first phase of Ola Futurefactory is completed, production trials of Ola Scooter will commence. Ola has partnered with Siemens to build its electric vehicle manufacturing facility.

“Today’s agreement for long-term debt financing between Ola and Bank of Baroda signals the confidence of the institutional lenders in our plans to build the world’s largest two-wheeler factory in record time. We are committed to accelerating the transition to sustainable mobility and manufacture made in India EVs for the world and happy that Bank of Baroda has joined us in our journey,” said Bhavish Aggarwal, Chairman, and Group CEO Ola.

Stressing on the central government’s Make in India program looking to enable India to become a global EV leader, Sanjiv Chadha, Managing Director, and CEO, Bank of Baroda, added, “We are delighted to partner with Ola for their EV business. The Ola Futurefactory will put India on the global EV map, and we are proud to be associated with them.”

In May last year, Ola Mobility acquired Etergo BV, an Amsterdam-based electric scooter maker. Etergo, founded in 2014, had developed an all-electric scooter, AppScooter, that uses high energy density batteries to provide a range of up to 240 km.

Ola Electric also raised ₹17.25 billion (~$250 million) from Tokyo-based SoftBank in July 2019. SoftBank’s Cayman’s Islands entity, SB Topaz (Cayman) Ltd, was allotted 4,326 compulsorily convertible preference shares in Ola Electric Mobility.

The government of India has been pushing the adoption of electric two-wheelers by boosting demand incentives. Recently the Department of Heavy Industries has introduced a specific demand incentive of ₹15,000 (~$205)/kWh for electric two-wheelers under the Faster Adoption and Manufacturing of Electric Vehicles in India Phase-II (FAME-II) program.