Co-op Bank sets aside Ksh.1.5B to finance electric matatus

The financing facility, which will be deployed over the next 12 months, will offer Saccos up to 90% financing of the cost of acquiring electric vehicles, easing the initial investment burden on public transport operators.

Under the arrangement, the bank will lend directly to Saccos to enable them to acquire electric vehicles as fleets rather than financing individual vehicle owners.

The facility will also offer loans at rates 1% below the prevailing Kenya Shilling Overnight Interbank Average (KESONIA) rate, alongside financing for charging infrastructure and digital fare collection systems.

Speaking during an e-mobility forum in Nairobi, Co-op Bank Director of Cooperatives Banking Vincent Marangu said the financing model was designed around the operational needs of public transport Saccos.

“Saccos are already planning for electric, and what they need is financing that works for a whole fleet. We have supported public transport Saccos for years, and we know how they operate their business,” said Marangu.

The bank has already released the first two 16-seater electric vans, supplied by BasiGo, to Enabled Mashariki Sacco under the programme.

BasiGo Chief Executive Jit Bhattacharya said the lower operating and maintenance costs of electric vehicles could improve returns for public transport operators.

“What matters most to an operator is what each vehicle earns at the end of the day. Electric vans cost less to run and maintain than fuel-powered vehicles, and those savings go to the owner,” he said.

The financing initiative comes as Kenya seeks to expand electric mobility, with operators facing pressure from volatile fuel prices and rising operating costs.

According to the bank, Kenya has 974 registered public transport operators running an estimated 7,000 vehicles, while about 2,500 new PSVs worth KSh15 billion enter the market annually.

Co-op Bank is also working with electric vehicle dealers, insurers and Kenya Power to support vehicle supply, insurance and charging infrastructure.

The initiative is expected to give matatu Saccos access to financing and other services needed to gradually modernise their fleets and reduce dependence on conventional fuel-powered vehicles.