KARACHI: The federal government has launched a cost-sharing, interest-free loan scheme for electric bikes, rickshaws, and loaders to promote energy efficiency and green technologies in the automotive sector.

According to a circular issued by the State Bank of Pakistan (SBP) on Monday, the scheme titled Cost Sharing Scheme for Electric Bikes and Rickshaws or Loaders will provide interest-free loans to end users, with the government covering the entire markup.

The programme targets financing of approximately 116,000 e-bikes and 3,170 e-rickshaws or loaders during FY26. A minimum of 25 per cent of e-bikes will be allocated to women, while up to 10pc will be reserved for individuals using e-bikes for business purposes such as courier or delivery services. Additionally, up to 30pc of e-rickshaws or loaders will be allocated for fleet operators.

The scheme will be implemented in two phases. In the first phase, 40,000 e-bikes and 1,000 e-rickshaws/loaders will be financed. The remaining 76,000 e-bikes and 2,170 three-wheelers will be financed in the second phase.

The maximum repayment period will be two years for e-bikes and three years for rickshaws or loaders. Borrowers will only be required to pay the principal amo­­­­unt and insurance in monthly instalments.

Govt to finance over 119,000 two- and three-wheelers during FY26 under green transport push; allocates 25pc e-bikes for females

All Pakistani citizens, including those from Gilgit-Baltistan and Azad Jammu & Kashmir, are eligible, subject to age res­t­r­­ictions. For e-bikes, the age limit is 18-65 years; for rickshaws and loaders, the limit is 21-65 years. Fleet operators may also apply for three-wheelers, subject to criteria set by the Steering Committee.

The loan size is Rs200,000 for an e-bike and Rs880,000 for an e-rickshaw or loader. The debt-to-equity ratio is set at 80:20, where the borrower contributes 20pc equity. This equity portion includes both the borrower’s contribution and any applicable capital subsidy.

If the 20pc equity is fully covered by the subsidy, the borrower will not be required to make any upfront payment. The capital subsidy is up to Rs50,000 for e-bikes and up to Rs200,000 for e-rickshaws or loaders.

Banks will charge financing based on the 6-month Kibor plus 2.75pc, but the end user will pay zero per centt, as the federal government will bear the full markup cost.

The scheme is part of the government’s broader efforts to reduce fuel dependency, cut emissions, and support sustainable transport alternatives.

Published in Dawn, September 30th, 2025