Ola Electric on Monday said that it has signed an agreement with Bank of Baroda to raise $100 million. This is the largest long-term debt financing agreement in the Indian electric vehicle industry, the company said in a statement. “This 10-year debt of US$100 million is towards the funding and financial closure of the Phase one of the Ola Futurefactory, Ola’s global manufacturing hub for its electric two-wheelers," the cab aggregator said.
“Today’s agreement for long term debt financing between Ola and Bank of Baroda signals the confidence of the institutional lenders in our plans to build the world’s largest two-wheeler factory in record time. We are committed to accelerating the transition to sustainable mobility and manufacture made in India EVs for the world and we are happy that Bank of Baroda has joined us in our journey,” said Bhavish Aggarwal, chairman and group chief executive officer, Ola.
“The government has brought in several policies to incentivise make-in-India and to enable India to become a global EV leader. Ola is leading from the front and we are delighted to partner with them for their EV business. The Ola Futurefactory will put India on the global EV map and we are proud to be associated with them”, said Sanjiv Chadha, managing director and chief executive, Bank of Baroda.
Ola has started construction of the world’s largest two-wheeler mega-factory on a 500-acre site in Tamil Nadu’s Krishnagiri district in Tamil Nadu. It will be operational by 2022. Spread over a total area of 500 acre, the mega-factory will have an initial capacity of 2 million units a year in first phase, the company said in a statement. Ola Futurefactory will serve as the company’s global manufacturing hub for its range of electric-powered scooters and two-wheelers across India and international markets including Europe, UK, Latin America, Asia Pacific, Australia and New Zealand.
Earlier this month, Ola revealed the complete look of its first electric scooter. Ola CEO Bhavish Agarwal shared a video of the scooter’s drive performance and tweeted that the EV “goes 0-60 faster than you can read this tweet! Ready or not, a revolution is coming!” Ola’s first scooter is expected to be priced around Rs 1 lakh.
Last week, Ola said Temasek, Warburg Pincus affiliate Plum Wood Investment and Ola founder Bhavish Aggarwal have invested $500 million in the ride-hailing platform ahead of its proposed IPO. This was among the largest investments in the Indian consumer internet space by these funds, the company said. Ola continued to scale up across various categories and geographies in its ride-hailing business, it added.
“Over the last 12 months, we’ve made our ride-hailing business more robust, resilient and efficient. With strong recovery post lockdown and a shift in consumer preference away from public transportation, we are well-positioned to capitalise on the various urban mobility needs of our customers," Aggarwal said.