Electrifying Public Transport: a Route to Africa’s Just Transition

By Nick Hay, Climate Champions Team | August 19, 2024

Jit Bhattacharya, co-founder of Kenya-based electric vehicle technology company, BasiGo

BasiGo is an electric vehicle technology and financing company dedicated to introducing electric bus services in sub-Saharan Africa. Headquartered in Nairobi, Kenya, the company provides state-of-the-art, electric buses, along with charging and maintenance services for city bus operators.

We spoke to BasiGo’s co-founder, Silicon-Valley innovator, Jit Bhattacharya, who explained his vision for clean public transport in African cities, as a means to cut emissions, while driving growth and green industrialization. Jit also discussed his recent meeting with the U.S. President Biden and Kenya’s President Ruto – to discuss what Biden called “a new era of technological cooperation” between the US and Kenya.

BasiGo E9 Kubwa Bus. Photo Credit: Doreen Orishaba (Staff- BasiGo)

How did BasiGo come about, what’s your vision for African e-mobility?

Basigo was inspired in the first few days of the COVID pandemic in Kenya. We witnessed something remarkable here in Nairobi when, for three days, all of the city’s diesel buses came to a stand still.

Over five and a half million people live in Nairobi. 60% of its citizens commute to and from work on buses. This adds up to 20,000 buses and a lot of diesel fumes. The government of Kenya stopped the buses from operating to slow the movement of people and in turn, the pandemic. But remarkably, what emerged, almost overnight as the fumes cleared, was Mount Kenya, some 350 kilometres away from Nairobi. The snow-capped peaks of ‘Kirinyaga’ or the ‘mountain of whiteness’, had been invisible for decades, but for three days it became visible on the city’s horizon.

For that brief time, the whole city looked up to witness the earth breathing. For me,, it was a brief glimpse of just how much damage diesel buses are causing to the environment of this rapidly growing city. I knew then it was time to take action.

We already knew that Kenya has amazing renewable energy resources – and over 90% of the electricity feeding the Kenyan grid comes from renewable sources. So, we surmised, if we could replace Kenya’s diesel buses with electric buses, we could, firstly, have a greater impact on CO2 than introducing electric buses almost anywhere else in the world. Secondly, we could create a future where the skies of Nairobi allowed its citizens to see Mount Kenya every single day.

Nairobi is set to become one of seven African megacities by mid century, with its population expected to double to more than 10 million people by 2050. Considering this, we said, clean public transport in Nairobi is not just something that we want to happen, it needs to happen.

A couple of years later, fuel prices rocketed due to the invasion of Ukraine, rising by over 70% since early 2022. The high cost of fuel imports is actually one of the major threats to economic growth in Kenya, (and also across Africa). We examined the impact of the spike in diesel price on the running costs of buses, finding that, on average, the cost of filling up buses with diesel in the depot is 75% higher than the cost of charging electric buses. 

This was a real ‘Wow moment’ for us! We realised our mission to introduce electric buses into Africa was entirely sound, economically. This gave us the impetus to launch BasiGo, to help to insulate Kenya from the fuel crisis by putting electric buses onto Nairobi’s roads. 

Today, we have 28 E-Buses in operation, 24 are in Nairobi Kenya. We have also expanded into Rwanda, where we have four buses operating in the capital, Kigali. Our buses in Kenya are powered by 90% renewable energy from the Kenyan grid, that creates a huge carbon saving of 50 tons of CO2 annually for each bus we deploy.

Since our first E-Buses went into operation in March of 2022, they have driven two million kilometres, and carried over three million passengers. Crucially, they’ve also avoided the cost of over 400,000 litres of diesel, and almost a thousand tons of CO2. E-Buses are a triple win – boosting the profits of operators by cutting their fuel costs; reducing air and carbon pollution, and also giving citizens access to modern, safe, high quality, and affordable public transport. 

We’re really excited about what we’ve achieved since we were founded in June of 2021.

How do you make electric business affordable for Kenyan bus operators?

Although electric buses are far more competitive than diesel buses, the huge barrier to adoption is the upfront capex cost of buses, and the upfront costs of the charging infrastructure. These costs are almost three times higher than the cost of an existing diesel bus in Africa. 

In Africa, the cost of capital is very high – especially in the private sector, where most buyers are acutely cash sensitive. This challenge led to our key innovation, which surprisingly, is not the buses themselves!

In fact, central to BasiGo’s mission is our ‘Pay-As-You-Drive’ financing model that makes electric buses affordable, and profitable for bus operators. 

Operators don’t face the high upfront cost burden, which is limiting electric vehicle (EV) adoption all over the world. Rather than trying to sell an electric bus over a diesel bus, we offer them to operators on a lease.  For a very low deposit, we enable operators to access the economic benefits of electric buses. And once the E-Buses are on the road, our Pay-As-You-Drive lease also includes all the costs of charging and service and maintenance. Through this model, bus operators are actually breaking even within a matter of months. 

We’re proud that the Kenya Bus Service (KBS), the oldest bus operator in the country – which celebrates its 90th anniversary in 2024 – has just released its first electric bus with BasiGo. It’s amazing that we’re helping to bring a legacy company like KBS into the electric age by giving them access to new technology which, as diesel prices rise and fall, keeps public transport consistently affordable for passengers.

As a result, we currently have reservations for 500 electric buses from operators in Kenya and 300 from Rwanda. The operators that have put down money are saying “Yes, we want to change, we want our next purchase to be an electric bus!” 

We now have a big job ahead of us in terms of delivering on that promise, especially as the electric buses that we deliver here in Kenya are actually all locally assembled. 

How does BasiGo’s locally assembly model contribute to Kenya’s just transition?

One of our big announcements of the last few months was the launch of the first dedicated electric bus assembly line here in Kenya. With our new high volume assembly line at the Kenya Vehicle Manufacturers (KVM) plant, we plan to locally assemble 1,000 E-Buses for Kenyan bus operators by the end of 2026. 

This investment will create 300 green manufacturing jobs in Kenya. Already, BasiGo has over 500 orders from bus operators in Nairobi and an additional 300 reservations from bus operators in Kigali, Rwanda.

So, the transition to E-Buses goes well beyond the environmental benefit. It is an opportunity for Kenya to establish itself as a manufacturing hub for modern EV’s, and the components that make up those vehicles. 

Sub-Saharan Africa is notoriously often-times treated as the dumping ground for old, used vehicles which are imported from around the world. It’s a big problem. A just transition is not possible in Africa until we can break these cycles and actively create a modern vehicle manufacturing sector. We’re starting in Kenya.

Why did you recently meet U.S. President Joe Biden and Kenya’s President William Ruto?

I had an incredible opportunity to meet with both President Biden and President Ruto at the White House in May 2024 as part of a panel of Kenyan business leaders. President Ruto was in the US on a State visit.

The background of the meeting was the growing alliance between the U.S. and Kenya, one in which the United States is eager to see growth in Kenya’s domestic manufacturing sectors. I was there to share the extraordinary opportunity for green industrialization and green jobs in Kenya through the local assembly of modern Electric Vehicles.

We also discussed how currently, Africa relies heavily on Chinese technology for the growth of the EV sector, as Chinese EV technology leads right now on cost and performance. However, over the long term, there is no reason that, as we locally assemble and manufacture these technologies, that the supply chain cannot come from all over the world.

It was exciting for me to share the BasiGo vision to build local green manufacturing here in Kenya with both Presidents Biden and Ruto and I look forward to seeing their plans to support the growth of the cleantech industry become a reality.

How would you describe Africa’s potential as a future climate leader?

It’s clear to me that the coming few decades will be Africa’s decades. We’re the fastest growing continent and we have six of the fastest growing economies in the world. 

Historically, when we look at the climate space, Africa has been overlooked because the continent is currently only 4% of global CO2 emissions. When it comes to transport, the general sentiment has been that EV technology is too expensive for Africa. Yet, when you look closely at the markets where EVs have really taken hold first, places like China, India and Southeast Asia, are emerging markets.  The key difference, however, is that – unlike the Global North, emerging economies are not passenger car markets. In fact, in emerging regions, people are used to commuting on bicycles, motorbikes, ‘tuk tuks’ – and especially on shared passenger vehicles like buses.

Africa’s integral relationship with public transport can actually help it become a global climate leader by making it first to transition to affordable low-carbon public transport powered almost entirely by renewable energy – which is an abundant resource here. Increasingly, I think the rest of the world will look to Africa and say, actually we need to copy what’s happening in cities like Nairobi, and Kigali. 

Why is now a critical moment to establish sustainable transport systems in Africa?

When considering Nairobi’s transition from a city of five million to 10 million people, I often reflect on Los Angeles, where I grew up—a city known for its eight-lane freeways teeming with traffic. As Nairobi grows to a similar size, it’s clear that following the development path of Los Angeles, where everyone owns a personal car, is unsustainable, regardless of whether the cars are electric. 

But, if we can create a public transport system that’s modern, comfortable, connected and sustainable, we can get people – especially the young population here in Nairobi, the growing middle class, out of their passenger cars, and into buses. Then they will say, “why would I drive to work, when we have a bus system that’s incredibly convenient and comfortable?” 

That’s the real aspiration. The greatest climate impact we can make is to get somebody out of a passenger car and into a bus.

How can public and private sector leaders enable clean transport systems?

The creation of enabling ecosystems is absolutely central to accelerating e-mobility. 

Rwanda is a classic example of a country that has taken a leadership position by supporting e-mobility through a comprehensive package of incentives, such as EV tax breaks, reduced electricity tariffs to cut running costs, and rent-free access to government-owned land for charging stations across the country. It’s becoming very clear to other governments that Rwanda’s sustainable transport system has taken off due to the enabling environment – and excitingly, the Kenyan government is now also looking to employ similar mechanisms to scale e-mobility.  

International climate investors are also eager to support our model, because the impact on CO2 emissions is massive. But investors need to see a stable policy environment, that’s a vital area where certain African countries have struggled. This has led investors to say, “If the policy environment changes every year, and we’re making a financing play, how can we trust that the model that works today is going to work tomorrow?” Stability matters.

Another key aspect of Africa’s transition to sustainable transport is green industrialization. In this area, Kenya is really leading in using the transition to catalyse the revitalisation of its automotive manufacturing sector. We’re talking about a brand new manufacturing sector in terms of the production of EVs – everything from two wheelers all the way up to passenger vehicles like buses. Job creation goes hand in hand with green growth – and so, increasingly, creating policies to capitalise on green industrialization is an important opportunity that markets are taking notice of.

What’s holding back private sector investment? 

This is a key question that we look to solve every single day at BasiGo. I think the main reason the billions aren’t flowing yet, is because around 95% of the EV industry in sub-Saharan Africa comprises startup companies. We’re a brand new industry. Most of the startup companies in the EV sector and sub-Saharan Africa are less than five years old. BasiGo is one of the leaders and we’re only three years old. 

Often, financing only flows to startups at an incremental rate. New companies get seed funding, then focus on mitigating risk, then they raise the next round of funding, and then repeat this process over and over again, gradually reaching scale. Startup funding is notoriously more difficult to secure for African startups, especially for capital intensive businesses in the cleantech sector

However, I believe the dam is about to break. Smart investors are getting ready to enter markets and realise the financial returns of getting in at the ground floor. Stability is increasing in markets like Kenya and Rwanda – every single day that passes, EVs are performing better, across all vehicle classes, than internal combustion engine vehicles and the economics are working. 

We buy state of the art, modern electric buses from markets like China and India, and tailor them to work effectively in Africa. But, ultimately this is proven technology which has come down the cost curve in other markets. Nowadays, the cleantech market is increasingly focused on business model innovation to facilitate widespread technology adoption. That’s what every EV company in Africa is doing, including us. It’s now a growth problem. And that’s why BasiGo’s principal innovation – our ‘Pay As You Drive’ model – is geared to address the financing challenge.

What is the challenge that has defined your career to date?

I first started working in the renewable energy industry in South Africa in 2003. At that time, my mentor in South Africa really helped me to crystallise the key problem facing African development, which is the fact that the average African uses one twentieth of the amount of energy that the average American uses. 

We have a real problem that needs to be solved. Everyone agrees that energy equality is a must, that Africans deserve access to the same level of energy – and development goes hand in hand with energy access. But energy access for all needs to work in a sustainable way, otherwise the planet is toast. This became the challenge that has defined my career. 

I went on to work in the energy access industry, and also as an investor. As I became familiar with Africa’s energy challenges, I began searching for an investment opportunity that could generate the largest positive climate impact in Africa. 

Over time, I realised that what this challenge really needs is an ‘innovation mentality’, because ultimately the big problem that has to be solved is financing. This is not about financing just for the actual business model of a company, but about unlocking capital flows from overseas markets – hundreds of millions, eventually billions of dollars of capital. We think that, to electrify the entire bus fleet in Kenya, for example, would require around four billion US dollars. 

To unlock that level of finance, we need a commercially-viable model that ultimately supports the climate mission. When I saw all of these different factors aligning – the economics; the climate impact; the opportunity to invest in a just transition, I thought, this is something that absolutely has to happen. Let’s not wait for someone else to do it. Let’s take the Silicon Valley initiative and do it ourselves. Let’s prove that it’s possible.

What gives you optimism?

At BasiGo, we’ve identified and built an investment opportunity in Africa that has an outsized climate impact, which invites all citizens, even low-income populations, to participate in a just transition.

But, the opportunity we identified is not unique, other such opportunities exist in Africa and elsewhere. There is a presumption that climate investment should always go towards the high-emitting countries, like the US and China. Yet, some of the greatest opportunities for immediate climate impact are overlooked in markets like Africa. 

Africa is projected to overtake Asia as the world’s fastest-growing region, with a ready market of over 1.4 billion people, twice that of Europe. Investors and entrepreneurs alike should remember the population growth factor when planning their role in the inevitable transition. We can achieve climate impact and sustainable growth – in the same breath, through investments in Africa.

The high cost of capital in Africa must be tackled, as right now it is slowing investment from African governments and private sector entities into climate technologies. My hope for the next COP climate summits is that this discussion finds the right avenues to solve the cost of capital problem. Through this, we can help African countries to boost all of their industries – not just e-mobility, but clean energy, agriculture, and industry, which are vital to a just transition.

What I really hope is that, at the subnational government-level, Ministries of energy, industrialization and technology, actively look to public transport as an enabler for clean growth. I hope that Africa’s leaders do not plan to wait another five to 10 years. The technology is ready now. At BasiGo we have proved that e-mobility is not just technically viable, it’s economically viable for African markets.

We are in a race between reaching climate tipping points and economic tipping points. While the direction is certain, the speed at which we move is our choice. Now is the moment to act.