C40, The Climate Pledge and development banks propel electric freight in Latin America

C40 and The Climate Pledge are joining forces with the financial sector to develop products that address specific market needs for last-mile delivery in Latin America.

C40 and The Climate Pledge are collaborating with the International Finance Corporation (IFC), Nacional Financiera (NAFIN), Financiera de Desarrollo Nacional (FDN), VGMobility and Development Bank of Latin America (CAF) to develop credit lines tailored to the market and facilitate some of the first deals in the e-freight sector - ensuring that solutions meet the spectrum of its demand.

This alliance is part of Laneshift - a collaboration between C40 and The Climate Pledge to reduce carbon emissions by reimagining freight logistics through zero-tailpipe-emission vehicles and optimised travel routes. The Climate Pledge committed US$10 million to C40 to accelerate the development and deployment of zero-tailpipe-emission electric trucks and charging infrastructure across major cities in India and Latin America. According to the Bloomberg New Energy Finance Electric Vehicle Outlook 2023 (BNEF), light, medium and heavy-duty commercial vehicles contribute to 41% of annual transport-related CO2. C40 and The Climate Pledge are working to enable conditions to accelerate finance across the four countries in Latin America where Laneshift is working: Brazil, Colombia, Ecuador and Mexico.

"Through Laneshift we've engaged with manufacturers, shippers, carriers, and tech solution providers who share that financing is a barrier to entry and stifles scale in rapidly urbanizing cities across Latin America", said Sarah Dimson-Tararuj, Head of Strategic Projects and Programs at The Climate Pledge. "The collaboration between C40, The Climate Pledge and financial institutions aims to address this challenge by developing local solutions that will help crowd-in future investments in the transition to EV freight."

The financial sector's commitment to supporting the transition to zero-tailpipe-emission freight transportation helps lay the groundwork for technical advisory services and financing solutions tailored to the unique challenges of fleet electrification.

"The electric freight transport sector is experiencing significant growth driven by the need to reduce greenhouse gas emissions, improve air quality, and increase energy efficiency in freight transport," said Lusanda Madikizela, Head of Zero Emission Freight at C40 Cities. "The collaboration with key financiers is an important step in overcoming the financial and technical barriers to large-scale adoption of electric freight solutions."