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.