PAKISTAN: ELECTRIC TWO AND THREE-WHEELER FINANCING APPROACHES


  • SOLICITATION NUMBER: 0002007931
  • INSTITUTION:  IBRD/IDA
  • ASSIGNMENT LOCATION: Pakistan
  • ISSUE DATE AND TIME: Mar 27,2024 06:26
  • CLOSING DATE AND TIME: Apr 25,2024 23:59

Pakistan is highly vulnerable to climate change. Pakistan consistently ranks among the top 10 countries worldwide most affected by climate change. The growing transport emissions are partly due to the increasing reliance on private vehicle modes for transportation. Pakistan has taken meaningful steps towards transport sector decarbonization; including steps to encourage EV adoption. The National Transport Policy (2018) of Pakistan highlights the importance of public transport and non-motorized transport; and multimodal integration. Pakistan has introduced mass transit systems (mostly bus rapid transit) in several key cities such as Karachi; Lahore; Islamabad-Rawalpindi; and Multan; and is in the process of expanding these systems.  EV adoption has fallen well short of targets and currently stands at less than 1 percent across all segments.  The biggest barrier to EV adoption in Pakistan is the higher acquisition costs relative to ICE vehicles.Besides costs; the lack of access to financing is a key constraint. The access to affordable commercial financing could reduce upfront cost barriers by distributing acquisition costs over a longer period. However; such options are limited even for ICE 2Ws. Overall; Pakistan has very low rates of financial inclusion with only 21 to 30 percent of people having formal bank accounts.The objective of this study is to identify approaches to improve access to affordable commercial financing for the purchase of electric 2 and 3 wheelers in Pakistan; as well as specifically in Karachi. The consultant is expected to build on the extensive body of work on this topic from India; including instruments under development with World Bank support. The consultant shall assess the applicability of such approaches in Pakistan via in-depth market consultations; and customize the approaches where necessary.

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