CAF and CUTCSA of Uruguay advance in the structuring of a loan for electric buses

CAF -development bank of Latin America and the Caribbean- is in negotiations with CUTCSA for the structuring of a long-term senior loan of up to US$ 15 million. This financing will allow the fleet of diesel buses to be partially replaced by electric buses, to reduce carbon emissions and move towards sustainable public transportation in Uruguay.

This project is part of CAF's sustainable mobility program “E-Motion: E-Mobility and Low Carbon Transport”, which has the participation of the Green Climate Fund, which generates additional financial, environmental and social benefits for the operation.

The signing, in which Sergio Díaz-Granados, executive president of CAF, and Juan Salgado, president of CUTCSA, participated, formalizes the relationship between both parties and establishes the rules for the evaluation and structuring of the loan, ensuring a clear contractual framework to move forward. in the development of the project.

The renewal plans of the public transport company are grouped into four five-year blocks. The first instance includes the renewal of 25% of the fleet by 2025. At the end of the second block, in 2030, 50% of the fleet will have been renewed. By 2035, 75% of the fleet will be electric and, finally, in 2040, CUTCSA will have 100% electric units in its fleet.

This is possible due to the consistency in Uruguay's public policy, which plays a crucial role in promoting electric mobility. The Ministry of Industry, Energy and Mining (MIEM), together with the Ministry of Economy and Finance (MEF), implemented important measures to promote electric mobility within the framework of the second energy transition. These measures include new regulations that favor electric mobility, the creation of an Electric Mobility Table, the extension of the electric charger network and the strengthening of support programs for the acquisition of electric vehicles.

A highlight of these policies is the recently implemented Sustainable Mobility Trust. This trust seeks to finance programs that enable collective land transportation of passengers in a sustainable manner and at affordable prices. The resources allocated to this trust were previously allocated to the ticket management trust, but will now be allocated to this new mechanism.

The main objective behind the proposed changes is to allow the current subsidy, which is allocated to diesel consumption, to also be used for companies to purchase electric buses. This is especially relevant to allow the bankability of the business models that make this type of operations viable.

This operation is a clear example of CAF's commitment to supporting solid local transportation companies to advance the decarbonization of transportation in the region, thus reaffirming its commitment to being the green bank of Latin America and the Caribbean.