Context
The government of Pakistan has implemented new regulations aimed at facilitating the registration of Electric Three-Wheelers (E3Ws) and expediting the issuance of manufacturing licenses for Electric Vehicle (EV) manufacturers. Despite these efforts, the adoption of EVs in the Three-Wheeler (3W) segment, which comprises approximately 2 million vehicles, remains minimal due to various underlying factors.
Goals and approach to transformational change
The project aims to increase the visibility of battery swapping value chain for mobility purposes by deploying a network of swapping stations and electric-three-wheelers across the Punjab Province in Pakistan.
The project will establish an integrated electric mobility ecosystem centred on swappable batteries, solar powered charging infrastructure and a dedicated first loss guarantee fund to unlock commercial lending for SMEs and other private investors. Over the five-year implementation period, it aims to deploy 9,614 swappable electric three wheelers, 137 battery swap stations and 12.3 MWp of solar PV capacity across Faisalabad, Lahore and Multan, with support from the Mitigation Action Facility to demonstrate the model at scale.
By combining technical assistance, regulatory development, investment models, private sector partnerships and a scalable, replicable design, the project seeks to lay the foundation for broader national uptake. The battery swapping approach is intended to address key barriers associated with fixed battery EVs, including limited residential parking and frequent power outages. The integration of solar PV with battery swap stations will provide renewable and alternative power sources, reduce charging costs and lower GHG emissions.
Components and support mechanisms
The Financial Cooperation (FC) component will comprise a demonstration facility and a loan scheme backed by a first loss guarantee. A EUR 3 million MAF-grant funded demonstration phase will pilot and operate the battery swapping model in each partner city, in cooperation with LUMS and selected private sector partners. Building on this proof of concept, a further EUR 3 million first loss guarantee is expected to leverage up to EUR 18.6 million in commercial lending from the project’s two partner banks, Habib Bank Limited and Meezan Bank, thereby enabling private investors to scale up battery swapping infrastructure and related e mobility investments under a franchisee-based model.
The Technical Cooperation (TC) component of the project will assist the private sector to accelerate the development of the domestic EV industry. On the policy and regulatory front, measures will enhance public sector capacity in various areas including EV policy and regulation, standards and road safety, electricity supply planning and tariff design, gender diversity and social inclusion, environmental protection, and battery and solar PV recycling.
Long-term impact
It is estimated that the project would directly reduce 65,839 tCO2e during its implementation timeline and 404,068 tCO2e over lifetime of the supported technologies. Overall, the project is expected to strengthen the visibility and viability of the battery swapping value chain, catalyse wider EV adoption, build national capacity in e mobility, reduce vehicular air pollution, and attract further investment in manufacturing and franchising.
