The Delhi Government on Wednesday signed a Memorandum of Understanding (MOU) with Convergence Energy Services Limited (CESL) for providing five per cent interest subvention on purchase of a select categories of Electric Vehicles (EVs) in Delhi on loan.

The MOU was signed by Vinod Kumar Yadav, Deputy Commissioner, Transport Department, Delhi Government  and Polash Das representing CESL in presence of Transport Minister Kailash Gahlot, Dialogue and Development Commission Vice-Chairperson  Jasmine Shah, Principal Secretary cum Commissioner Transport Ashish Kundra and Special Commissioner SB Deepak Kumar.

According to the Delhi Government, the agreement will help in accelerating the adoption of lithium-ion-based e-rickshaws and e-carts along with electric autos and electric Light Goods Vehicles in the national Capital.

The five per cent interest subvention on loans on the purchase of EVs is in addition to the applicable purchase incentive of `30,000 and scrapping incentives of up to `7,500 under the Delhi EV Policy. Through this scheme, an electric auto and electric light commercial vehicle will be able to avail upto `25,000 additional benefit.

As per the MoU, CFSL will empanel Financial Institutions (FIs) like Scheduled Banks, Non-Banking Financial Institutions (NBFCs), and Micro-Financing Institutions (MFIs) through an open and transparent process to provide loans to electric vehicles at attractive terms.

Through this empanelment, the FIs will provide loans with a minimum 80 per cent Loan-to-Value (LTV) at interest rates of a maximum of 20 per cent (including the interest subvention) for a loan tenure which is in the best interest of the consumer.

For reference, if the mandatory maximum interest rate is 20 per cent, Financial Institutions (FIs) empanelled by CESL are expected to provide loans to the borrowers at interest rates not more than 15 per cent.