E-mobility Forum – “A Business Opportunity in Motion”

On 26th August, USAID and the Private Financing Advisory Network (PFAN) hosted a webinar on e-mobility and the potential of electric vehicles to mitigate carbon emissions in Pakistan. The multi-stakeholder online event shed light on the business potential in the electric transition of the country.

The forum was held to discuss electric vehicles and e-infrastructure building as key priority areas within the USAID – PFAN Pakistan Private Sector Energy Project (PPSE), which aims to expand the portfolio of commercially-viable clean energy projects in Pakistan by providing support to enable them to access financing and reach financial close.

Launched officially in February 2021, PPSE is funded by USAID and implemented by PFAN. The project targets small and medium-sized enterprises (SMEs) in Pakistan working on the country’s energy transition to mitigate carbon emissions and bolster climate innovation and resilience.

The virtual forum commenced with opening comments from Peter Storey, Acting Chief of Party for PPSE and PFAN Global Coordinator, who commented on how the PFAN approach has been adapted towards the needs and potential of the Pakistani clean energy landscape for PPSE.

“In an intensive market scoping study conducted at the beginning of PPSE project, the e-mobility sector was identified as showing significant potential for deal flow and investment,” said Storey. He said this event will help viewers to understand the electric vehicle (EV) sector in a more nuanced way and to better identify its various opportunities and challenges.

Rabia Bukhari, Program Management Specialist, Energy at USAID, commented on Pakistan’s climate vulnerability and which initiatives USAID is undertaking to help the country’s climate mitigation and resilience.

Pakistan has consistently ranked among the top 10 countries most vulnerable to the impacts of climate change.

Bukhari deemed electric vehicles as an “adaptation measure” to bring down the country’s escalating pollution and liveability concerns. Pakistan’s air quality is currently 5 times above WHO exposure recommendations.

The USAID representative lauded the efforts of the Government of Pakistan in transitioning from fossil fuels to renewable energy resources such as biogas, hydro, wind and solar. She noted that USAID has more than a decade of experience working closely with the Government of Pakistan on construction and rehabilitation as well as technical assistance through different mechanisms, in which PFAN PPSE is included.

“Having an affordable EV charging infrastructure is equally important, and in this regard USAID is partnering with the US Department of Energy to advise NEPRA, the regulatory authority for EVs. We are in discussion to review electrical standards and monitoring structure to ensure charging efficiency,” said Bukhari.

Deputy Chief of Party, PFAN PPSE, Ghazil Jabbar, then presented PPSE’s value proposition to entrepreneurs in Pakistan, illuminating how enterprises can benefit from PFAN services.

Jabbar shared that PFAN has supported nearly 1,000 projects to date with more than 300 projects in the current pipeline, raising USD 2 billion in total investment leveraged by PFAN-supported projects. He explained that PFAN, hosted by UNIDO and REEEP since 2016, has developed a unique and proven public-private partnership business model, which is now being adapted and dedicated to the Pakistan market through the PPSE project.

“PPSE is a very personalized service, and advisors will work very closely with project developers. Projects on clean energy and from all provinces in Pakistan are eligible to receive PFAN / PPSE support, but preference will be given to specific market segments in clean energy,” said Jabbar.

PFAN boasts a credible knowledge and expertise base with more than 160 climate, clean energy and finance experts. Nagaraja Rao, PFAN’s Head of Investment Facilitation, from Bangalore, India spoke of the robust advisory power of PFAN, citing PFAN success studies from Asia.

Speaking to the prospective and budding EV market, Rao shared that a record $12.8B in funding was raised over 193 deals in 2020 from electric vehicles alone.

Rao raised attention towards the EV30@30 campaign with the ambition of the Clean Energy Ministerial’s Electric Vehicles Initiative (EVI), setting the objective to reach a 30% sales share for EVs by 2030. This campaign has been adopted by several countries such as Canada, Chile, China, Finland, France, Germany, India and Japan, to name a few.

“Pakistan is a signatory to that, though the scope is limited to passenger light duty vehicles. However, the potential for EV scale up is huge in Pakistan,” said Rao.

Next a panel discussion brought together various key players from the private, public and academic sector. Moderated by Ammar Qureshi, PFAN PPSE Expert, the panel comprised of Ali Khar, CEO Ona Mobility; Naveed Arshad; Founder Neubolt/ Associate Professor, LUMS; Asim Ayaz, GM Policy, Engineering Development Board and Muhammad Iftikhar Javed, Head Auto Business, Bank Alfalah.

Ayaz shared that EDB is predominantly dealing with the manufacturing side of EVs, however, he raised the importance of policy making and referred to the recently passed EV policy in the country.

“Discussion on electric vehicle infrastructure has been underway by creating a committee of various ministers to highlight policy, especially tariffs. The current policy has only 1% tax on import of EV parts for local manufacturers to create balance between local manufacturers and imports.
The policy has been improved and incentives for all different types of vehicles are active,” said Ayaz.

He also shared that entrepreneurs in the EV sector are always welcome to connect with EDB and visit their office for more information and guidance.

Khar stressed the importance of the role reducing the electricity tariff to drive EV production and consumer adoption forward. He called the latest EV policy a “launching pad” for innovation and scaling up.

He also discussed his own project, Ona Mobility, which is already receiving support from PPSE, saying, “We are currently about to reach financial close, and the public will be seeing our vehicles very soon that are mostly geared towards the common man”.

Dr. Arshad noted that Pakistan is theoretically one of the countries in the world that is ripe for the electric vehicle transition due to its vast electricity reserves, however he stressed that the electricity infrastructure needs to be strengthened.

“One thing about the EV value chain that needs to be solved in the country is the battery. Whoever can crack this puzzle, will see a lot of success and make the value chain stronger,” added Dr. Arshad.

Speaking to the finance opportunities and challenges, Javed shared that there some risks with secondary re-sale of EVs, but banks such as Alfalah are working to de-risk the buying and selling of EVs.

“We have introduced several schemes on [the] consumer side to make EVs more affordable. I would request State Bank and Government to give more incentives and lower prices so more people can buy them,” added Javed.

The panel discussion was followed by a lively question and answer round where online participants asked questions regarding incentives to startups, technical knowledge, market share, etc to the panellists.

The forum ended with a demonstration by Hammad Bashir, PFAN PPSE Expert, on how to apply to PPSE to be accepted in the development pipeline as a project developer working in the EV or any other clean energy sector.

During the online event, several polls were launched and were answered by almost 100 participants. 57% attendees felt lack of access to financing was seen as the biggest challenge to mainstream e-mobility in Pakistan, whereas, 41% thought that access to access to investment by private institutions will drive Pakistan’s EV sector forward.

31% of participants said they need more help with business model building, while introduction to investors and financiers is a close second. PPSE is dedicated to supporting clean energy and climate innovation in Pakistan in all these facets and will hold other sector-based online and in-person events in the near future.

To visit the website, click here.

Learn more about the application process and the USAID – Pakistan Private Sector Energy Program (PPSE).

Read the Q&A Report here.