Electric bus firm BasiGo has entered into a financing deal with Kenya Commercial Bank in a move aimed at expanding adoption of clean vehicles in Nairobi.
Under the agreement, KCB will extend a three-year loan facility covering up to 90 percent of the Sh5 million price for the electric buses.
BasiGo which began operations in Nairobi in March 2022 in partnership with Citi Hoppa and East Shuttle says the electric buses have covered 90,000km, and has carried more than 112,000 commuters.
So far, the firm, which has received more than 100 reservations for its K6 electric bus, says it looks make the vehicles affordable to drive up uptake.
“The key to getting electric buses on the road in Kenya is to make them affordable to PSV owners,” said Jit Bhattacharya, CEO and co-Founder at BasiGo, noting the deal with KCB will see an increase in the purchase of the electric buses.
“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.”
BasiGo sells the electric buses directly or through a lease model. The company owns the vehicle’s battery, and is leased to the PSV operator through the Pay-As-You-Drive subscription of Sh20 per kilometre.
The model, BasiGo notes, enable PSV operators to cut risks by guaranteeing battery performance and providing charging and maintenance services for the vehicles.
A number of banks are looking to fund projects that take into account conservation of the environment under the Environment Social Governance (ESG) regulations, which have taken centre stage on the corporate scene as part of efforts to curb climate change.
NCBA Group has already rolled out a Sh2 billion electric vehicle financing, a five-year deal that involves asset financing of up to 80 percent of the total cost. The lender will also 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 firms such as M-Kopa and Watu credit for smaller motorcycle and tuktuk units.
Electric motorcycle companies are also using partnerships with asset financiers to boost sales.
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.