Nairobi-based mobility start-up BasiGo, which offers electric bus services in sub-Saharan Africa, has partnered with KCB Bank Kenya to finance green public service vehicle (PSV) buses. The Shariah compliant version of the financing will be provided through KCB SAHL.
The start-up has designed the ‘Pay-As-You-Drive’ financing model to help bus operators in Kenya afford electric bus purchases. The model is a combination of an operating lease for the battery with a subscription for electric bus charging and maintenance services provided by BasiGo to the bus owner.
“The Pay-As-You-Drive model works by separating the value of the battery from the value of the bus. Bus operators purchase the electric bus from BasiGo exclusive of the battery for a purchase price similar to a diesel bus. Operators then lease the battery from BasiGo through a daily Pay-As-You-Drive subscription based on kilometers traveled,” Jit Bhattacharya, the co-founder and CEO of BasiGo, told ISFI.
The subscription fee includes all costs for charging at BasiGo’s charging stations as well as the cost for service and maintenance.
BasiGo launched its first-ever electric buses into pilot operations in Kenya in March this year. The pilot buses have driven over 90,000 km and carried over 112,000 passengers in six months. The start-up has received over 100 reservations for their electric buses from bus operators in Kenya.
“Over 90% of Kenya’s grid electricity currently comes from renewable sources. As a result, replacing a single diesel bus in Kenya with electric immediately mitigates over 50 tons of CO2 per year,” Jit added. As such, imported diesel is one of the largest sources of air pollution in African cities and they expose bus owners to the volatility of the global oil market.
BasiGo is currently in discussions with several financial institutions in Africa to develop similar partnerships as many of them are keen on supporting the shift to electric mobility and projects that contribute to tackling the climate crisis, Jit explained. He told ISFI that it is at the financial institution’s discretion whether they decide to offer the financing through a Shariah compliant or conventional model.
The start-up entered into a partnership with Family Bank on the 14th October 2022 to provide financing facilities for the electric bus.