Kenyans order 100 electric buses as KCB inks financing – Business Daily
A BasiGo full electric passenger bus. PHOTO | BasiGo
Electric bus supplier BasiGo has signed a financing deal with KCB Bank to scale up operations in Nairobi after a seven-month pilot.
The deal will see the Kenyan bank extend a three-year loan facility covering up to 90 percent of the Sh5 million purchase price for the electric buses.
The company that launched operations in Nairobi in March 2022 in collaboration with Citi Hoppa and East Shuttle says the electric buses have covered 90,000km ferrying over 112,000 passengers.
The company says it has received more than 100 reservations for its K6 electric bus and wants to scale supply next year, partnering with KCB to target passenger service vehicles.
“The key to getting electric buses on the road in Kenya is to make them affordable to PSV owners. The partnership we have signed today with KCB Bank is game-changing. It will allow bus owners to secure asset financing for an electric bus exactly in line with how they have been purchasing diesel buses.,” said Jit Bhattacharya, CEO and co-Founder at BasiGo.
BasiGo sells the electric buses directly or through a lease model and the company retains ownership of the battery within the bus.
The battery is subsequently leased to the PSV operator via the Pay-As-You-Drive subscription of Sh20 a kilometre.
BasiGo says they mitigate the risks to PSV operators by guaranteeing battery performance and providing all charging and maintenance for the bus.
Electric vehicles are attracting the financial muscle of lenders keen on securing green financing and complying with Environment Social Governance (ESG) regulations.
NCBA Group launched Sh2 billion electric vehicle financing as customers increasingly shift to battery-powered cars amid climate change advocacy and the rise in global oil prices.
The five-year deal will see customers enjoy asset financing of up to 80 percent of the total cost.
In addition, NCBA will give 10 percent interest rate on a reducing balance for electric vehicle loan applications received within the first 90 days.
Besides banks, E-mobility companies are also tapping buy now pay later companies like M-Kopa and Watu credit for smaller motorcycle and tuktuk units.
Electric motorcycle companies are leveraging partnerships with asset finance lenders to drive sales in Kenya targeting boda boda riders.
Swedish-Kenyan technology company Roam has partnered with M-Kopa to deliver a fleet of motorcycles by the end of 2022 in time for mass deployment in early 2023.
ARC Ride Kenya which launched a plant in Kenya producing 500 two and three-wheeled electric scooters and bikes each month also partnered with MKopa and Watu credit to be able to offer the product through flexible financing terms.
As companies like Arc Ride and BasiGo look to bring affordable electric vehicles into the market, a new industry is forming, the battery charging hubs that will replace the fuel stations in the future.
Kenya Power said it will start constructing electric charging systems for homes, businesses and the public across the country as the shift to clean transport gathers momentum.
The electricity distributor said it has enough electricity to charge 50,000 buses and two million motorcycles during off-peak hours.
The State-owned power utility is seeking a firm to build an e-mobility network infrastructure system (ENIS) in Nairobi and Nakuru to pilot the charging stations.
Kenya Electricity Generating Company (KenGen) has also installed an electric vehicle charging station in Nairobi as the State agency joins other actors steering the push for e-mobility.