ISLAMABAD: The Ministry of Industries and Production has devised a scheme to initially produce 100,000 e-bikes in 18 months to diversify fuel consumption as well as help reduce carbon emissions.

The scheme was presented in the last cabinet meeting and the prime minister referred it to the Economic Coordination Committee for further deliberation and working on the financial model. The ministry has proposed a subsidy of Rs17.5 billion in three years to encourage the purchase of comparatively costlier bikes.

As per the plan, the government would bear a downpayment of Rs90,000 for an e-bike with an estimated cost of Rs170,000 whereas the purchaser will pay Rs10,000 making the total initial payment to Rs100,000.

It is suggested that with government guarantees the bank would provide a Rs70,000 loan at Kibor+2 or 19 per cent which is estimated to be Rs13,300.

Through the proposed scheme, a 24-monthly installment plan has also been given under which the customer will be paying Rs4,310 per month which includes the principal amount of Rs2,917, interest payment of Rs1,109 and insurance payment of Rs284 (2pc).

Under the plan, the ministry expects the production/sale of 15,000 e-bikes during the ongoing fiscal year whereas 60,000 and 100,000 e-bikes are targeted to be produced in 2022-23 and 2024-25, respectively, mal(ing the total production of 175,000 e-bikes in three years.

Through the subsidised programme, the e-bikes would be provided to students with salaried parents, female students/ employees (20pc quota), transgender persons (1pc quota), government employees, private sector salarie d/self-employe d individuals with NTN and bank account, government/armed forces pensioners and Imam Masjid/Hafiz Quran/ Muazzam, duly qualified from an institute recognised by Government of Pakistan (endorsed by Ministry of Religious Affairs).

The working paper of the scheme has suggested three subsidy models for the scheme including cash purchase under which the government will share Rs100,000 through banks and consumers would pay a lump sum Rs70,000 from their sources.

Under the subsidy leasing model, the R s100,000 are met on sharing basis by the government and consumer whereas Rs70,000 would be provided by banks as a loan with a 50pc credit guarantee by the government.

Under the third model, 30pc downpayment of subsidy will be met by the government with a 50pc financing subsidy and a 50pc credit guarantee. It is suggested that PSO may be given a task to install EV chargers at select outlets in the target cities and special meters for commercial charging stations, metering as per solar tariff.

The scheme may be initially started in Islamabad, Peshawar, Quetta, Lahore and Karachi.

As per an official statement, at present there are 90 companies manufacturing motorcycles and auto rickshaws in Pakistan and the country can manufacture 6 million motorcycles annually. It was further informed in the meeting that 22 companies have been issued licences to manufacture e-bikes.