Kenyan electric vehicle (EV) manufacturer BasiGo has successfully closed a $42 million funding round aimed at scaling its electric bus operations across East Africa. The funding round was led by Africa50, a pan-African infrastructure investor and asset manager, signaling a significant step forward in the region’s transition towards clean energy transportation.
The funding comprises $24 million in Series A equity financing and $17.5 million in debt facilities. The equity investment was supported by leading venture capital firms such as Novastar Ventures, CFAO Kenya, Mobility54, SBI Investment, Trucks VC, Moxxie Ventures, and the Susquehanna Foundation. The debt facilities were provided by British International Investment (BII) and the U.S. Development Finance Corporation (DFC), with $10 million from DFC dedicated to BasiGo Kenya, and $7.5 million from BII allocated for Rwanda’s electric bus deployment.
BasiGo’s Vision for a Greener Future
Founded in 2021, BasiGo’s mission is to drive the future of public transportation in Africa by transitioning the industry toward electric mobility. The company has set ambitious targets to deliver 1,000 electric buses across East Africa within the next three years. CEO Jit Bhattacharya expressed enthusiasm about the investment, highlighting Africa50’s involvement as a testament to the company’s potential and vision.
“Since we founded BasiGo, our mission has been to create the future of clean, electric public transport in Africa. We are thrilled to have Africa50, a premier African infrastructure investment fund, recognize the potential of our mission,” remarked Bhattacharya. He further emphasized how the combined equity and debt investment would bolster BasiGo’s ability to scale its operations and achieve profitability, especially with the support of BII to expand the company’s footprint in Rwanda.
Scaling Production and Expanding in East Africa
BasiGo’s capital raise comes at a pivotal moment in the company’s growth trajectory. The funds will primarily be allocated to increase manufacturing capacity at BasiGo’s assembly line at Kenya Vehicle Manufacturers. This production ramp-up will help meet the company’s goal of delivering 1,000 electric buses in East Africa. The investment will also support the expansion of BasiGo’s Pay-As-You-Drive financing model to include new vehicle types, making electric buses more affordable and accessible to public transit operators across the region.
This pay-as-you-go system allows bus operators to lease electric buses, reducing the upfront costs associated with EV adoption. Through this system, BasiGo has lowered the entry barrier for bus operators, encouraging a faster transition to green transport solutions.
Additionally, BasiGo plans to invest in the enhancement of its Jani technology platform. Jani, which facilitates fleet management and real-time data tracking for electric buses, aims to improve the operational efficiency and convenience of electric public transportation. As more buses are deployed, Jani’s integration will be key in managing electric fleets across urban and inter-city routes.
Expanding into Rwanda
In December 2023, BasiGo expanded its operations into Rwanda, introducing six electric buses as part of a pilot program running routes within Kigali and to nearby towns. These buses are testing the feasibility and efficiency of electric public transportation in Rwanda, a country known for its environmental policies and green initiatives. With the new funding, BasiGo will launch full-scale commercial operations in Rwanda, where demand is already growing. Over 300 reservations for electric buses have been placed by Rwandan bus operators, signaling strong interest in the company’s offerings.
The $7.5 million debt facility from BII is specifically geared towards supporting this expansion in Rwanda. By tapping into this market, BasiGo can demonstrate the scalability of its model in different urban environments across East Africa.
Transforming Sub-Saharan Africa’s EV Landscape
BasiGo’s recent funding round represents one of the largest investments in electric mobility in Africa, highlighting the growing importance of sustainable transportation in the region. As countries like Kenya and Rwanda grapple with the twin challenges of urbanization and environmental degradation, BasiGo’s electric buses offer a solution that reduces emissions while also addressing the need for efficient, reliable public transportation.
This investment will enable BasiGo to solidify its position as a leading player in Sub-Saharan Africa’s electric vehicle (EV) market. According to industry analysts, the African EV sector is still in its nascent stages but holds enormous potential, particularly in countries with high levels of urban congestion and growing middle-class populations.
In addition to public transportation, electric vehicles are gaining traction in sectors such as logistics and ride-hailing. This trend is expected to accelerate as governments in the region implement policies promoting the adoption of clean energy and incentivizing EV infrastructure development.
Global and Regional Support for EV Transition
BasiGo’s success is part of a broader movement towards sustainable transportation, as African countries strive to meet their climate change commitments. Both Kenya and Rwanda have signaled their intent to transition to green energy solutions, with policies that incentivize the adoption of renewable energy technologies. Kenya, for example, has pledged to achieve 100% renewable energy by 2030, with a strong focus on electrifying its transportation sector.
Governments across East Africa are also working to develop infrastructure that supports EV adoption, including the installation of charging stations and upgrades to the electricity grid to accommodate increased demand. Rwanda has been proactive in this area, setting ambitious targets for reducing carbon emissions and promoting sustainable urban development.
International development organizations such as British International Investment (BII) and the U.S. Development Finance Corporation (DFC) have been key partners in financing Africa’s transition to green energy. Their involvement in BasiGo’s funding round demonstrates the global interest in supporting Africa’s electric mobility revolution.
The Competitive Landscape in Electric Mobility
BasiGo is not the only player in Africa’s emerging electric vehicle market. Other companies, such as Opibus and Roam Motors (formerly Ampersand), are also making strides in the electric mobility sector. These firms are focused on providing electric motorcycles and buses, contributing to the growing EV ecosystem in East Africa.
Opibus, for example, is headquartered in Nairobi and is working on electrifying not just buses but also motorcycles, which are widely used in Kenya’s bustling cities. The company has garnered attention for its innovative approach to retrofitting diesel-powered buses and motorcycles with electric powertrains, a model that could help accelerate the region’s transition to clean energy.
The electric mobility landscape in Africa is still developing, but as more companies like BasiGo secure significant funding, the sector is poised for rapid growth. Investors are increasingly recognizing the potential of Africa’s urban transportation markets, where electric vehicles could significantly reduce emissions and lower fuel costs for operators.
Conclusion
BasiGo’s $42 million funding round is a landmark moment for electric mobility in Africa. With the support of leading investors and development finance institutions, the company is well-positioned to scale its operations across East Africa, starting with Kenya and Rwanda. The investment will not only help BasiGo deliver on its ambitious goal of deploying 1,000 electric buses but also contribute to the broader goal of reducing carbon emissions and promoting sustainable transportation in the region.
As Africa’s cities continue to grow, the need for efficient, green transportation solutions will become even more pressing. BasiGo’s innovative approach to electric buses and its focus on affordability through models like Pay-As-You-Drive make it a pioneer in the field, setting the stage for a cleaner, more sustainable future for public transport in East Africa.
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Photo source: Google
By: Montel Kamau
Serrari Financial Analyst
24th October, 2024
