250.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	250.0
Equity

* These investment figures are indicative

Project Outcomes Stakeholders. Environmental effect. The Project will reduce the carbon footprint of Element Fleet's clients by increasing the available fleet of electric vehicles for lease or purchase. The Project will support the Company's purchase of medium size trucks, minivans, and light commercial vehicles as well as compatible charging infrastructure. The proposed investment will contribute to Mexico's commitment to the Paris Agreement of reaching a 35 percent reduction in CO2 emissions below 2007 levels by the year 2030, particularly where commercial vehicles, given their greater number of daily kilometers travelled, present a larger opportunity for carbon reduction than personal vehicles. Overall, the transport sector is currently responsible for nearly 25-30% of Mexico's emissions and road transport represents more than 80 percent of the sector's emissions. Market Level Sustainability/Competitiveness: Element’s services provided with EV fleets enable users to benefit from a more cost-effective asset-light operation in an environmentally sustainable manner. The Project is expected to demonstrate the viability of the EV-based fleet service model, inducing a wider adoption among commercial/business users and ultimately reducing their carbon footprint and contributing to the decarbonization of the transport sector. Greater adoption of EVs among Element clients would be demonstrated through a higher proportion of EVs among Element’s vehicles under management (VUM) metric, which shows the number of vehicles that are being managed by Element and its subsidiaries.

Financial: Financing Structure and Resource Mobilization. IFC is structuring a first financing package of the peso equivalent of US$100 million of which US$75 million will be funded by IFC and US$25 million will correspond to mobilization from parallel or B lenders. The proposed financing to Element and the Element Mexico Subsidiaries in the form of a five-year local currency financing (vs Element’s standard 2-3 year financing period) will facilitate the diversification of its funding sources to support its Mexico expansion goals in the coming years. Over the medium term, it will enable Element Fleet to access financing through local banks, leveraging additional commercial lenders with peso liquidity, and potentially to enter the Mexican bond market in due course. IFC's participation in the transaction lowers parallel/B lenders' perceived risk given the absence of track record of the company's business model and allows them to benefit from IFC's expertise in assessing and structuring the transaction. The transaction will also be structured as an SLL, which is a new instrument for the Company and could become a starting point to tap further green finance products in the future. Non- Financial additionality: Knowledge Innovation and Capacity Building. IFC's contribution will focus on two areas: IFC will work with Element to enhance and improve its assessment, procurement and management processes for EVs and charging infrastructure, as well as contribute to the company's strategy to expand its decarbonization platform in Mexico, leveraging its global knowledge and experience in this sector. IFC will also develop an E&S action plan (ESAP) which will guide the Company in adopting best practices and complying with IFC's Performance Standards. IFC will build on the initial work which the Client has done in areas like gender and climate transition, and where the Company has shown interest in leveraging IFC's expertise to expand its corporate strategy.

Indicator	Metrics	Comments	Calendar Year 2022	Calendar Year 2023	Calendar Year 2024
Board Composition Total (#)	number		Pre-dates IFC investment	Pre-dates IFC investment	Pre-dates IFC investment
Board Composition Women (#)	number		Pre-dates IFC investment	Pre-dates IFC investment	Pre-dates IFC investment

Please refer to the related Environmental and Social Review Summary (ESRS) document for this project.

Please refer to the Environmental and Social Action Plan (ESAP) tab in the related Environmental and Social Review Summary (ESRS) document for this project.