NAIROBI, Kenya, Nov 13 – Co-operative Bank has set aside Sh1.5 billion to finance the acquisition of electric public service vehicles (PSVs), targeting matatu Savings and Credit Co-operative Societies (Saccos) as the country seeks to accelerate the shift away from fossil-fuel-powered transport.
The facility, which will be deployed over the next 12 months, will finance up to 90 percent of the purchase cost of electric vehicles, allowing Saccos to acquire vehicles as fleets rather than relying on individual operators to finance the transition.
The financing comes as the high upfront cost of electric vehicles and limited charging infrastructure remain key barriers to their adoption in Kenya’s public transport sector.
Co-op Bank Director of Cooperatives Banking Vincent Marangu said the lending model was structured around the operational needs of matatu Saccos, which typically manage multiple vehicles across different routes.
“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,” he said.
“That is why we are lending to Saccos directly, on stronger terms, so they can buy electric vehicles at the scale their routes demand.”
The bank will offer loans at one percentage point below the prevailing Kenya Shilling Overnight Interbank Average (KESONIA) rate, while also financing the installation of electric vehicle charging stations.
The facility will further incorporate digital fare collection systems, which could help operators improve revenue tracking and manage fleet operations.
Two 16-seater electric vans supplied by local electric mobility company BasiGo have already been released to Enabled Mashariki Sacco under the arrangement.
BasiGo Chief Executive Jit Bhattacharya said lower operating and maintenance costs could make electric vehicles economically attractive to public transport operators, although the savings will depend on vehicle utilization and financing costs.
“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,” said Bhattacharya.
“Working with Co-op Bank means more Saccos can access these vehicles, and we look forward to supplying the next ones.”
Kenya has 974 registered public transport operators running an estimated 7,000 vehicles, while approximately 2,500 new PSVs valued at Sh15 billion enter the market annually, according to figures provided by the bank.
The market presents an opportunity for lenders and electric vehicle suppliers to expand financing and deployment beyond pilot projects, particularly among organized transport operators.
The Government’s National Electric Mobility Policy provides a framework for investment in electric vehicles, charging infrastructure and incentives to support the transition.
Electric mobility could also reduce operators’ exposure to fluctuations in international oil prices, which influence domestic pump prices and transport operating costs.
Co-op Bank’s facility will also involve partnerships with electric vehicle suppliers, insurers and Kenya Power, bringing together financing, vehicle supply, insurance and electricity infrastructure.
