Ecofy Finance Private Limited has received DKK 90 million in loan financing from the Investment Fund for Developing Countries (IFU) to expand its lending portfolio for electric vehicles and rooftop solar installations in India. The funding is expected to support the financing of over one million electric vehicles and more than 1.5 GW of rooftop solar over the next six to seven years.
Ecofy plans to direct a portion of the financing toward individuals and small businesses that face challenges accessing traditional lending channels. According to Vivek Khandelwal, Treasury Head at Ecofy, “This investment is a pivotal moment for both Ecofy and the green finance ecosystem in India. The long-term capital provided by IFU empowers us to scale our climate-focused lending solutions while breaking down barriers for underserved borrowers.”
The market for electric vehicles in India has seen increased growth since 2021. Sales of electric two-wheelers grew by 30 percent annually, while electric three-wheeler (excluding e-rickshaw) sales increased by over 80 percent in the past 12 months. In total, over 1.7 million electric two- and three-wheelers were sold in India during this period.
Ecofy also aims to expand financing for rooftop solar installations. India has an estimated 637 GW of solar potential across its 250 million households, according to the Council on Energy, Environment, and Water. However, barriers such as low electricity consumption and limited financing options have constrained the sector’s growth. A report from IEEFA and JMK Analytics estimates that small and medium enterprises alone have a 15 GW rooftop solar potential.
IFU’s investment is part of the green strategic partnership between India and Denmark. Vibhor Singhal, Investment Manager at IFU, stated, “IFU is very pleased to support Ecofy in its pursuit to provide accessible climate finance to the masses. This investment aligns well with IFU’s strategy, as India is a core focus country and climate mitigation and access to finance are key impact priorities for IFU.”
Axis Bank acted as the exclusive financial advisor to Ecofy for the transaction.