Investment to accelerate adoption of green vehicles in emerging markets
IFC and ALD, a global vehicle leasing company and a subsidiary of Societe Generale, recently announced a partnership to reduce carbon emissions in transport by accelerating the adoption and penetration of green vehicles in emerging markets.
The $400 million IFC (International Finance Corporation) investment will help ALD grow its green fleet, a combination of hybrid, plug-in hybrid and battery electric vehicles, in seven countries – Türkiye, Mexico, India, Serbia, Romania, Bulgaria and Croatia.
The financing, which was intermediated by Societe Generale on behalf of ALD, is expected to add 15,000 green vehicles with the potential to reduce carbon emissions by 22,180 tons a year across the target countries by 2026.
Transport is the fastest-growing contributor to climate change, already accounting for 23% of global energy-related greenhouse gas emissions – 17% from road transport alone – a prime target for decarbonisation. The innovation and financing of green vehicles could cut millions of tons of carbon emissions produced by the transport sector in cities across the globe every year.
“The adoption of green vehicles is an important part of reducing carbon emissions in emerging markets,” said Makhtar Diop, IFC Managing Director. “Partnering with global players like Société Générale and ALD is an opportunity for IFC to scale financing for sustainable mobility and reflects our commitment to innovative financing models for climate solutions.”
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Promoting e-mobility is one approach that IFC is focusing on to support the global transition to a low-carbon economy. This is the largest single investment IFC has made in support of green vehicles.
“As a leading global sustainable mobility provider, our role is to make the energy transition happen across the 44 countries where we operate,” said Tim Albertsen, CEO of ALD. “This financial partnership will further strengthen our sustainable mobility strategy in emerging markets where adoption of low-emission vehicles remains quite low and enable us to accelerate the transition to green vehicles to fight climate change on a global scale.”
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This partnership and investment are aimed at helping to execute ALD’s core strategy, Move 2025, and promote sustainable mobility in customer solutions with green vehicles, focusing on battery electric vehicles at the heart of its offering.
The investment builds on IFC’s early-stage market and project preparation (“upstream”) work. A 2021 assessment focused on Brazil, India, and Mexico concluded that targeted and affordable financing along the electric vehicle supply chain is key to unlocking their growth in emerging markets.
The topic of sustainable transportation will be discussed at Africa’s Green Economy Summit, taking place from 22-24 February 2023 at Century City in Cape Town, South Africa.