Alina Oprea • 22 February, 2023 at 8:11 AM
IFC and ALD, one of the global leaders in vehicle leasing and a subsidiary of Societe Generale, have entered into a partnership to reduce carbon emissions from transport by accelerating the adoption and access of green vehicles in emerging markets. IFC's $400 million investment will help ALD grow its fleet of green vehicles, a mix of hybrid, plug-in hybrid and full electric vehicles, in 7 countries – Turkey, Mexico, India, Serbia, Romania, Bulgaria and Croatia.
The International Finance Corporation (IFC), a sister organization of the World Bank and a member of the World Bank Group, is the largest global development institution focused on supporting the private sector in emerging markets.
IFC has been supporting the development of the private sector in Romania since the early 1990s.
Through this partnership, which was brokered by Societe Generale on behalf of ALD, it is expected to finance 15,000 green vehicles with the potential to reduce, until 2026, carbon emissions by up to 22,180 tons per year in the targeted countries.
The transport sector is the fastest growing contributor to climate change, being already responsible for 23% of total greenhouse gas emissions – 17% of road transport – an area that represents a main objective for decarbonisation. Innovation and financing of green vehicles could reduce millions of tons of CO2 produced annually by this sector in cities, globally.
"The adoption of environmentally friendly vehicles is an important topic in reducing carbon emissions in emerging countries. Partnering with global players such as Societe Generale and ALD is an opportunity for IFC to expand sustainable mobility financing and reflects our commitments to innovative financing models for climate solutions," said Makhtar Diop, IFC Managing Director.
With 7,050 employees worldwide, ALD manages a fleet of 1.81 million vehicles (at the end of December 2022).
Promoting electric mobility is one of the areas IFC is focusing on to support the transition to a low-carbon economy. This is the largest single investment IFC has made to support green vehicles.
"As a world leader in sustainable mobility, our role is to enable the transition to electric mobility in the 44 countries where we operate. This financial partnership will further strengthen our electric mobility strategy in emerging countries where the adoption of low-carbon vehicles is still at a low level, and will also help us accelerate the transition to green vehicles to combat climate change at global scale," said Tim Albertsen, CEO, ALD.
This partnership and investment aims to implement ALD's core strategy, Move 2025, and promote electric mobility within its customer solutions, with an emphasis on electric vehicles at the heart of its offering.
The investment builds on IFC's upstream project and market readiness activities. A 2021 assessment from Brazil, India and Mexico concluded that tailored and accessible financing along the electric vehicle supply chain is critical to unlocking the pace of their growth in emerging markets.
IFC - a member of the World Bank Group - is the largest global development institution focused on the private sector in emerging markets. It works in over 100 countries. In fiscal year 2022, IFC committed a record $32.8 billion to private companies and financial institutions in developing countries.