By Evelyn Makena….
This story is part of a series examining locally driven, African solutions to climate change. It was produced in partnership with Africa Solutions Media Hub and the Mandela Washington Fellowship Reciprocal Exchange.
Nairobi, the capital city of Kenya is known for some unique features; multiple skyscrapers, lush forests, a national park and iconic wildlife. Yet a big part of Nairobi`s unique identity is hinged on its Matatus, a slang for mini buses, vans and buses used for public transportation around the city. Matatus weave through the city with blaring music and flashy lights. They bear artistic displays of graffiti artwork inspired by movies, music, religion, and other art representations. Matatus are an attraction especially for visitors. These privately owned mini buses provide transport for most of over 5 million people that live in Nairobi and meet 41% demand for urban transport.
Disrupting the sector
But amid the noise and colourful spectacles, a gradual shift is taking place. Over the past two years, private bus operators have been adopting electric buses, which are a more power efficient and environmentally friendly alternative to fossil fuel buses. Most of the vehicles in Kenya are fossil-fuel powered.
“I was first struck by how quiet and smokeless the electric buses are. It’s a win for the environment, the investor, and passengers as far as I can tell,” says George Muriithi Githinji, a matatu owner. Githinji is the Chairman and Cofounder of Oma Services Limited, a matatu business operating within Nairobi. Githinji said the company has over 20 diesel powered buses and in February this year, they acquired four electric buses.
“I first saw electric buses and learnt about their benefits four years ago while on a business trip in China. They were an instant attraction because of their fuel efficiency and minimal operation costs,” he says. So when Githinji who describes himself as a risk taker heard about a company that was selling electric buses in Kenya he was among the first matatu operators to get on board.
Shifting to electric buses presented an opportunity to reduce emissions from transport. According to the Kenya National Climate Change Action plan 2018-2022, the transport sector accounted for 13% of the country’s greenhouse gas emissions in 2015 and that figure is projected to rise to 17% by 2030 due to the sector’s growth.
The company behind the efforts to `green` the Nairobi Matatus is Basigo, an e mobility startup that started operations three years ago. According to Samuel Kamunya, BasiGo`s Head of Business Development, a few factors make Kenya an ideal setting to introduce electric buses. Kenya produces over 85% of its electricity from renewable sources including hydro, geothermal, solar and wind. The power is in surplus.
“One of the ways of tapping into this clean energy for the benefit of the environment is by introducing it to the transport sector,” says Kamunya. There are over 30,000 matatus in Kenya.
“Covid-19 lockdowns opened our eyes to the huge impact of transport on air pollution. When transport operations were halted, Nairobi skies were clear, and Mt. Kenya could be viewed from around the city for the first time in over two decades,” observes Kamunya.
In the long run, the company intends to contribute to Kenya’s efforts to cut down greenhouse gas emissions from transport. A 2020 national Energy Efficiency and Conservation Strategy by the Kenyan government envisions to increase the number of registered electric vehicles in the country to 5% by 2030. Presently, less than 1% of the 4.4 million registered vehicles in Kenya are electric.
Kamunya says electric buses traveling an average of 200 km a day can mitigate up to 40 tonnes of carbon in a year. The company currently has 19 buses operating in Kenya with plans to roll out a local assembly next year for use by private matatu operators.
“Electric buses have been a game changer for us. To start with, our customers love them and that’s a plus for business. The cost of operations are also comparatively lower to fossil fuel buses,” says Nelson Mwangi, a matatu owner and Chairman of Supermetro, one of the largest matatu companies in Nairobi. Out of its fleet of 440 buses, six of them are electric.
Innovative Payment model
Matatu entrepreneurs like Githinji and Mwangi acquire the buses from BasiGo through an innovative funding model referred to as Pay as You Drive. “The model aims to address three challenges, the prohibitive costs of electric buses, availability of charging infrastructure and technical expertise for maintenance of the vehicles,” says Kamunya.
The matatu operators interviewed said the cost of buying an electric bus is almost five times more than that of a diesel bus in Kenya. A 25 seater diesel bus will cost Ksh. 5.5 million (36,184 USD) while its electric counterpart retails at Ksh. 26 million (171,053 USD). While a 36 seater diesel bus costs Ksh. 7 million (46,063 USD) compared to Ksh.30 million (197, 369 USD) for an electric bus.
Under the Pay as You Drive model, buyers purchase the electric buses at a similar upfront cost of a diesel bus of the same capacity. Operators that make purchases under this arrangement co- own the bus/es with the e mobility company. An electric bus is mainly made up of two major components, batteries and a motor. It has no engine. Batteries store charge and power the motor for the bus to move. While the bus body and the motor belong to the matatu operator, the batteries are owned by BasiGo. The Pay as You Drive Model also offers a lease option where operators pay a refundable amount equivalent to 10% of the cost of a diesel bus for a minimum period of one year. Operators who lease have no equity on the bus.
Operators who either buy or lease the buses also pay a specific cost to the company for every kilometer covered. With this cost, the company provides charging infrastructure and technical expertise in case a bus develops mechanical problems.
“We have trained engineers and technicians and partnered with local garages to service and repair these buses. So far not even a single bus is grounded,” says Kamunya.
Benefits to operators, investors and passengers
Nairobi commuters have quickly embraced the electric buses. The electric buses offer USB ports, wifi, screens and security cameras. Since the buses have no engine they make no noise, which is attractive for passengers looking to travel in a quiet environment.
“With the diesel buses, you are forced to wait for passengers to fill the bus at the station, but with the electric bus, it’s the commuters that wait for the bus,” says Gachanja Kafau, a driver of one of the electric buses by Oma Services Limited.
This has led to better returns for matatu owners since unlike diesel buses that sometimes make trips not full to capacity, electric buses are struggling to meet the customer demand. Due to better returns, Githinji said drivers of electric buses in companies like Oma are paid about 30-50 % more than their diesel counterparts.
Matatu operators also say that electric buses have cut down 70% of operational costs compared to diesel powered vehicles. Fossil fuel buses end up consuming most of their daily earnings in fueling. That coupled with the regular servicing the engine powered buses need to work efficiently consumes more costs.
To power the buses, the company has partnered with Kenya Power and Lighting Company, which is the government entity that distributes and retails power, to set up three charging stations around Nairobi. To encourage adoption of e-mobility, the government has ensured that electricity tariffs for electric vehicles charging stations are almost 30% relatively cheaper, notes Kamunya. But being a new concept in the market, setting up these charging stations has been met with resistance from land investors who charge the company higher rates to lease or rent. Besides, about 25% of Kenyans have no access to electricity and setting charging stations in such areas requires that power is tapped elsewhere. Additionally, despite electricity being readily available in the country the costs of accessing it are high and prohibitive.
When fully charged, a 25-seater bus can drive for 250 Km while a 36-seater can cover 350 Km.
“Yet these charging stations are limited. Our buses cover a daily distance of about 400 Km thus need to replenish the charge during the day to keep moving,” says Mwangi.
Establishing more charging points will help cut down the vast distances covered to charge the buses. BasiGo is in the process of setting up more charging stations. In future, the operators hope that the batteries will also be improved to hold more power to cover longer distances.
Currently there is demand for electric buses outside Nairobi, with some operators hoping to introduce routes in nearby towns like Naivasha and Machakos that are within a radius of 100 km.