IFC - International Finance Corporation

11/20/2023 | Press release | Distributed by Public on 11/20/2023 06:57

IFC’s First Investment in E-buses Globally to Support Largest E-mobility Urban Public Transport Fleet in Latin America and the Caribbean

Santiago, Chile, November 20, 2023-A new model of private sector participation will help boost the resilience of mass transport systems in Chile, with IFC, member of the World Bank Group-in its first electric buses (e-buses) project globally-investing up to US$127 million to support the world's largest e-mobility urban public transport fleet outside of China, reducing greenhouse-gas (GHG) emissions.

IFC will also mobilize US$217 million equivalent in parallel loans by IDB Invest and BancoEstado, allowing Red Metropolitana de Movilidad, Santiago's public transit system, to obtain 992 e-buses to replace part of its existing diesel bus fleet and reduce its carbon footprint. With a novel concession model, separating fleet ownership from the operation, the buses will operate under 14-year bus supply leasing contracts with Chile's Ministry of Transport and Telecommunications.

The fastest-growing contributor to climate change, transport already accounts for 23 percent of global energy-related GHG emissions-16 percent from road transport alone-a prime target for decarbonization. E-buses represent a dynamic segment, with the global electric fleet projected to grow from 600,000 buses in 2020 to 1.6 million in 2025 and 3.6 million by 2030.

In Chile, transport contributes to nearly 25 percent of CO2e emissions and is responsible for 40 percent of Santiago's air pollution. In response, IFC's project, which will power the e-buses with renewable electricity, will contribute to climate mitigation, leading to GHG emissions reduction of 47,092 tCO2e annually.

"As Kaufmann Group, we are not only proud of the confidence and support of The World Bank through IFC, and the Inter-American Development Bank (IDB Invest) and BancoEstado in mobilizing resources under credit terms that are not readily available in the market, especially for public transport projects. This support translates into the possibility of providing the city and all public transport users of Santiago with 992 FOTON electric buses in addition to those already in operation. Through Andes Motor in Chile, we have reached 1,300 buses of this brand in operation, the largest fleet of electric buses in America. At the same time, we consider this as a great responsibility to society and the environment. This type of financing is undoubtedly a great milestone in the commitment to finance projects of social impact for Chile. Therefore, I would like to explicitly thank the World Bank through the IFC, the Inter-American Development Bank (IDB Invest) and BancoEstado for the trust placed in Grupo Kaufmann", said Alexander Köhler, CEO of Kaufmann Group.

By adopting clean bus standards, Chile yet again sets a precedent as a regional and global leader in cleaner fuels and vehicles. In 2011, Santiago became the first city in Latin America to adopt ultralow sulfur diesel and gasoline fuel standards. Chile was also the first Latin American country to adopt a joint CO2 and pollutant tax-it applies to light-duty vehicles, trucks, and sports utility vehicles-in October 2014.

"In IFC, we strongly believe that e-mobility can support the global transition to a low-carbon economy, moving the needle on air quality and GHG emissions from urban transportation. Our presence in this new, large and strategic sector will help support Chile's climate goals. By greening the bus fleet in Santiago, IFC will contribute to a sustainable urban transport ecosystem in the country, creating jobs and fostering cleaner and more efficient technologies," said Alfonso García Mora, IFC's Vice President for Europe, Latin America and the Caribbean.

Active in Chile since 1957, IFC has invested US$1.3 billion, only in the last 18 months, in 9 impactful projects mainly related to education, financial inclusion, and renewable energy.

About IFC
IFC - a member of the World Bank Group - is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2023, IFC committed a record $43.7 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises. For more information, visit www.ifc.org

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About Kaufmann Group

Suministradora de Buses K Cuatro SpA is a special purpose vehicle (SPV) owned by Sociedad de Inversiones K Cuatro SpA , Infrabridge EBUS CHILE SpA and Comercial Motores de Los Andes SpA. Sociedad de Inversiones K Cuatro SpA is owned by Inversiones Kaufmann Chile S.A. and Infrabridge EBUS CHILE SpA.]