KCB’s & BasiGo’s Electric Bus Financing Partnership Could Disrupt The Status Quo For Kenya’s Public Transport Operators.
I was recently listening to a podcast about the transition from horses to cars many years ago. At the time, people looked down on cars with disdain, seeing them as being somehow below horses which had been the dominant form of transportation for the masses. People saw cars as a fad that would come and go, and eventually, horses would remain, which as we all know never happened.
Today, the majority of us use cars, buses, motorcycles, or some form of vehicle to get us from place to place, near and far alike. However, the majority of these tend to be powered using some form of internal combustion engine or ICE, a technology that has been with us for over 150 years.
We live in a time when it is increasingly clear that the world is going through massive climate change which is having catastrophic consequences on a global basis. One of the key contributors to climate change is the use of millions of vehicles globally that collectively emit gargantuan amounts of carbon into the atmosphere.
Therefore, it stands to reason that many globally are turning to electric vehicles or EVs which have become increasingly popular for their efficiency and practicality as one of the ways to reduce climate change globally.
Earlier today, KCB, one of Kenya’s largest integrated financial services groups, and BasiGo, a Kenyan e-mobility startup and financing company that supplies electric buses, signed a partnership agreement. Make no mistake, this is a big deal when you consider what it may mean for public transport in Kenya going forward.
KCB will provide up to 90% funding with an extended repayment period of 36 months for buyers of BasiGo’s electric buses and associated services like embedded tracking and fleet technologies as well as insurance financing, battery charging, after-sales service, and maintenance provided by BasiGo.
If you read this last paragraph carefully you will see what I mean when I say this partnership could disrupt the status quo of the public transport system in Kenya. In a nutshell, KCB is not just providing financing for a bus but rather KCB is financing an entire ecosystem of integrated offerings that BasiGo is offering to the customers of their electric buses.
This ‘bundling’ of sorts of all the things that are normally sold as aftermarket or post-purchase add-ons is now part of the initial purchase price of a bus. In fact, you could say that BasiGo customers are not really buying an electric bus but rather buying an electric bus service that they then resell to their passengers.
BasiGo’s Pay-As-You-Drive financing business model makes electric buses more affordable and convenient for public transporters to purchase and operate than conventional diesel buses whilst accessing financing terms from KCB that are very compelling for first-time buyers. This de-risks the whole process considerably and allows public transport operators to ‘taste’ the concept before choosing to invest in much larger electric bus fleets.
BasiGo is selling its electric buses from Kes. 5 million whilst retaining ownership of the battery in the bus which is subsequently leased to public transport operators via a Pay-As-You-Drive (PAYD) subscription for only Kes 20.00 per kilometer! This means BasiGo mitigates risk by guaranteeing battery performance and providing all charging and maintenance for its electric buses.
Indeed, BasiGo recently concluded its pilot program with Citi Hoppa and East Shuttle that started in Nairobi in March 2022 and achieved over 90,000 km and saw over 112,000 passengers transported. BasiGo has already received over 100 reservations for its K6 Electric bus and is set to deliver new buses in early 2023 to SACCO’s on its reservation list.
If we look at the escalating costs of fuel in Kenya today as well as the massive environmental implications from carbon emissions due to the thousands of cars on Kenyan roads today, we can see that it’s not a matter of if but when electric buses and vehicles will start going mainstream at scale.
This process will be accelerated by the likes of BasiGo and their electric buses since the entire business model is radically different and will ultimately change how public transport operators in Kenya work going forward. This is disruptive stuff at play and I can’t wait to see Kenya’s transport sector go fully electric in the coming future.