Managing Director of  Basi-Go, Moses Nderitu, shares his experience about e-mobility in Africa, including untapped opportunities for growth in public transport.

 

We are a company that is facilitating e-mobility for public transport in Africa. To a large extent, we are a financing company because through our Pay- as- you- drive model, we are able to make electric buses affordable to public service operators by creating an innovative way of financing it. Currently, most public service vehicles are financed by banks but with electric vehicles being quite expensive with a very high cost of acquisition and a low cost of operation, we create a situation where you pay more or less the same amount you pay for a diesel vehicle and then subscribe to a pay-as- you drive model which is a kilometer-based financing.

First you have to look at the African energy mix. If you look at a country like Kenya, it gets a lot of our energy from renewable resources; hydro-power and geothermal sources.  Currently, most of the countries in Africa have the opportunity to do a lot of solar and now, wind is becoming a key factor. But what are we spending most of our energy on?  Africa is not that industrialized; Most of our energy is going towards transportation and what is powering the transport industry is fossil fuels a lot of which is not coming from Africa.

Most of the countries in Africa have the opportunity to do a lot of solar and now, wind is becoming a key factor. But what are we spending most of our energy on? 

Take for example the East African region- we are net importers of oil. However, the majority of the oil we import is not going into industries but into public transport. On the flip side, this is a region that has abundant resources of renewable energy. Ethiopia, for example, has more power than they can consume and have joined the East African power pool. That gives you a very good opportunity to electrify public transport.

The biggest impact if you were to electrify transport is in the public transport sector because at least 50 to 60 per cent of the populations across African countries use a form of public transport. The motorization rate is very low.

Impacts by partners and US$1.3 million grant

E-mobility is still new in Africa, and it’s full of challenges. But as pioneers, we’ve tackled many of them by dealing with regulations and building infrastructure for e-mobility growth. To overcome these challenges, we’ve teamed up with others who are interested in helping out.

We’ve partnered with bus owners, customers, licensed transport providers, and local manufacturers. We’ve also joined forces with charging companies like Vivo Energy to set up charging stations.

Getting funds from banks is crucial for us. Luckily, we’ve already made agreements with some banks. However, banks in Africa are more traditional, and getting funding for projects that make a positive impact is still a work in progress.

The only way we can solve most of our challenges is by partnering with other people and interested groups to ease the burdens.

USAID helped kick off a 3-month pilot phase in Rwanda. We introduced the first four buses, which are now running with three operators. Other operators are starting to book buses by putting down deposits.

With USAID and Solutions Plus’ support, we got the pilot going. It’s great when organizations like these back projects to get them off the ground. But it’s up to us to make sure they grow. We’re always on the lookout for grant opportunities, especially for training and building infrastructure, which are crucial for expanding our operations.

Effectiveness and financial benefits to bus owners

If these buses were sold locally, you’d have to buy a bus and then set up your own charging station, akin to purchasing a vehicle and establishing your own petrol station. This poses the first barrier to entry. We assist in overcoming this obstacle by installing charging infrastructure aligned with the locations where our buses operate.

In terms of cost-effectiveness, there’s a significant upfront expense. However, over an eight-year period, you’ll find that the total cost of ownership of an electric vehicle is lower than that of a car running on fossil fuel. With our pay-as-you-drive model, we encourage clients to make a lower deposit, sometimes even less than what you’d pay for a diesel car, and start earning from day one. If your cost curve declines steeply over 8 years, we further level it out because you earn from day one throughout the 8 years.

Majority of our normal routine service and maintenance is done overnight, that way the bus is available during the day. We have been getting up to 99 per cent uptime within a 30-day period- meaning the day is available all through the 30-day period.

We operate for eight years because many of our batteries come with an eight-year warranty or are guaranteed for up to 600,000 kilometers. Therefore, we aim to provide ample time for you to see a return on your investment. Interestingly, some of our clients start seeing returns as early as 6 months after acquiring the vehicle.

Uniqueness of the Pay-As-You Drive financing model

Our Pay-As-You-Drive model not only makes our buses affordable but also positions us as a major stakeholder, as our earnings are tied to the bus’s movement. Most of our routine servicing and maintenance are conducted overnight, ensuring the bus is available during the day. Achieving up to 99 per cent uptime within a 30-day period means the bus remains operational throughout.

From a technological standpoint, we’ve developed a platform that integrates financial and telematics aspects. This allows us to track the bus, monitor battery health, and assess driver efficiency at any given time. Currently, we’re exploring the feasibility of implementing passenger counts, a feature our competitors haven’t yet adopted.

When you purchase a vehicle from us, we embark on this journey together. It’s a genuine partnership, and we’re invested in ensuring the vehicle generates revenue for the owner/investor. If your earnings per kilometer fall below a certain threshold, we notify them promptly—we aim to minimize empty miles. We’ve integrated this technology because we’re committed to ensuring the battery lasts for the entire eight-year period. If, for any reason, the battery fails prematurely, we’re equipped to replace it promptly to minimize vehicle downtime.

Collaborations against infrastructure challenges

Two years ago, having a conversation with anyone in the government about e-mobility seemed like a far-fetched idea. Many viewed it as a mere pipe dream. However, significant progress has been made since then. We recognize the government as a crucial stakeholder because regulatory frameworks heavily influence what can be accomplished.

To illustrate, just two years ago, registering an electric bus in Kenya was a daunting task. Regulators had not considered electric vehicles in their registration processes. We had to engage operators in discussions about transitioning to electric vehicles, addressing concerns such as the safety of batteries and potential risks like fire hazards.

Kenya is the right place to do this because we have 90 per cent renewable energy, not only is it renewable, then we have more energy than we can use at night.

Taxation posed another challenge. In Kenya, vehicle taxation is typically based on the CRSP, which estimates the vehicle’s cost. However, as no electric vehicles had been sold in the country before, the tax for a brand-new electric vehicle was disproportionately high.

We had to negotiate these issues from the outset. Additionally, regulations governing the establishment of charging stations were non-existent. It’s worth acknowledging the current government’s commitment to e-mobility, as it was included in their manifesto. We’ve been actively collaborating with the government, and I must say they have been open and receptive to our efforts.

Targeted countries for implementation of e-mobility

Kenya has always been the country we wanted to start with and scale up in. However, Rwanda became extremely attractive mainly because it has very aggressive EV policies and friendly incentives. There is no tax at all on fully built electric vehicles, there is a very attractive e-mobility tariff from the power company and the government is even going as far as providing land for charging infrastructure. So that then became a very natural territory for us to explore and we felt we could scale up quite quickly there

Also, Rwanda has a shortage of public transport buses and so the need is unlike in Kenya where you have to deal with very many players.

We currently do not have any immediate plans of expansion to other countries. We would like to get to a certain level of scale in Kenya and Rwanda before considering other countries. We get invitations and proposals from African countries; I have spoken to people from Guinea, Senegal, South Africa, Nigeria, Zambia and most recently Ghana. Every of these markets have their nuances and regulations and so you can’t just can’t take our model directly.

Future of eco-friendly transportation system in Africa

Environmental impacts at the core of everything we do. Kenya is the right place to do this because we have 90 percent renewable energy, not only is it renewable, then we have more energy than we can use at night. At night, is when the buses are not operational-they are parked and charging.

Our plan is to have at least 1000 buses on the road by 2026 which means we will be consuming 80 GW of power from Kenya Power and Lighting Company (KPLC) of what they got their current curtailment at. With a curtailment of 400 GW today, we are taking 80 GW-that tells you the impact we can make on their bottom line but also on the environment in this country. We want to be able to impact both Kenya and Africa by taking advantage of Africa’s renewable resources to convert that into a sustainable transport model.