Non-banking financial company Ecofy has secured an investment of ₹900 million (~$10.83 million) from FMO, a Dutch entrepreneurial development bank, to facilitate product diversification and support its expansion across India.

The company provides loans to electric vehicles (EV), rooftop solar projects, and small and medium enterprises providing E2E digital experience.

The investment will be divided into two equal tranches. It comes with a commitment to climate action and is intended to fuel Ecofy’s loan book.

“Securing an investment from FMO marks a pivotal moment for Ecofy, reinforcing our commitment to addressing the climate finance gap for small business owners and individuals. The investment aims to play a critical role in decarbonizing energy, particularly in a rapidly growing economy like India. This collaboration not only strengthens our financial standing but also affirms our vision for a cleaner and more resilient future,” said Rajashree Nambiar, co-founder, managing director, and CEO at Ecofy.

“The collaboration with Ecofy gives us the chance to support improved access to climate-friendly products to individuals and SMEs in India. We are especially enthused by the convergence of impact in terms of financial inclusion and positive environmental impact,” said Cornelias Van Aerssen, Manager at FMO’s private equity department.

Ecofy is promoted by climate impact investor Eversource Capital, which aims to mobilize and deploy capital at scale to combat climate change and accelerate toward net zero goals.

“Ecofy has been set up to build a digital-first last mile climate finance solutions business to support India’s economic growth in a sustainable and inclusive manner,” said Dhanpal Jhaveri, CEO at Eversource.

Last December, the State Bank of India signed a $165 million line of credit from the World Bank to finance rooftop solar projects in the residential and institutional sectors.

Electric vehicle sales in India reached a record 1.53 million units in 2023, as opposed to the million units that were sold in 2022, registering a 50% year-over-year increase.