NCBA MAKES KENYA’S E-MOBILITY JOURNEY   SMOOTH

The transport  sector is a significant contributor to global greenhouse gas emissions, with road transport accounting for approximately  seventy  five  percent of these emissions.  In Kenya, the  sector is responsible for 24 percent of the country’s total energy-related carbon dioxide emissions. To address this challenge, Kenya has been exploring the potential of e-mobility. This  presents a promising solution to mitigate the environmental impact of traditional fossil fuel-based transportation.

What is  imperative?

The transport  sector in Kenya has been growing  very  fast, driven mainly   by urbanization and economic development. This growth has led to increased greenhouse gas emissions, air pollution and traffic congestion. This  poses   significant challenges to the country’s sustainable development goals (SDGs).

The need to transition to cleaner and more efficient modes of transport  has become increasingly important. As a result, e-mobility has emerged as a potential solution to these challenges.

Electric vehicles (EVs) offer several advantages over traditional fossil fuel-based vehicles.  The advantages  include :  lower operating costs, reduced greenhouse gas emissions and improved air quality. Moreover, EVs can be powered by renewable energy sources further reducing their carbon footprint.

 Trends  in Kenya

Kenya has been taking steps to promote e-mobility, with the government launching the National Electric Mobility Strategy in 2019. The strategy aims to increase the adoption of EVs in the country, with a target of having  five  percent of all new vehicle sales being electric by 2025.

Several private sector players have also entered the e-mobility market in Kenya. For instance, NCBA Group, a prominent financial services conglomerate in East and West Africa, has been actively contributing to the advancement of e-mobility in Kenya. The Group, with its headquarters in Nairobi, and subsidiaries in various East African countries, plays a crucial role in promoting sustainable transportation solutions in the region.

NCBA’S  journey

Kenya has made remarkable progress in its e-mobility sector, with a notable example being the integration of electric buses into public transportation systems and the completion of electric bus assembly by companies like BasiGo and  Associated Vehicle Assemblers (AVA).

As of December 2023, the Energy and Petroleum Regulatory Authority (EPRA) reported 2,079 electric vehicles registered in Kenya, including motorcycles, station wagons, tuk-tuks and buses. This indicates  a growing acceptance of electric vehicles across various sectors.

Kenya’s commitment to e-mobility is further evidenced by Kenya Power’s investment of Kshs. 258 million over the next three years in EV infrastructure, encompassing nationwide charging stations. Already an EV charging station has been launched in Nairobi, with plans for nine more installations in strategic cities like :  Nakuru, Mombasa, Mtito Andei, Kisumu, Eldoret  and Nairobi.

This infrastructure expansion, including a charging station at Kenya Power’s Ruaraka depot, signifies the country’s dedication to building a robust electric vehicle infrastructure, encouraging widespread adoption and contributing to a cleaner transportation future.

Additionally, as a leading provider of asset  finance, NCBA Group has been supporting the transition to electric vehicles. NCBA is one of Kenya Power’s partners, collaborating to facilitate the adoption of electric vehicles by offering financing for up to  eighty   percent of the total cost of personal or public service EVs.

Sustainable transportation

NCBA  has   solidified    its position as the Kenyan market leader in car financing, boasting a significant market share increase from  thirty three  percent in 2021 to  thirty six   percent in 2022 for its asset financing business.  This achievement is fueled by a three-sided approach: innovation, efficiency and a steadfast commitment to sustainability.

Recognizing the environmental imperative, NCBA took a pioneering step in 2022 by establishing a dedicated Kshs. 2 billion fund specifically for financing EVs. This initiative underscores NCBA’s dedication to supporting a cleaner future for  the   transport   sector in Kenya.

NCBA prioritizes EV financing and the deployment of EV charging stations as key pillars within its comprehensive sustainability strategy. These efforts contribute to a low-carbon operating model, ultimately mitigating the long-term impact of climate-related risks on the bank’s performance and the environment.

At the NCBA KMI Motorshow 2023, NCBA Bank Kenya MD  and   CEO John Gachora emphasized the significance of government policies that promote  EVs, underscoring their transformative potential.  This shift towards greener transportation promises not only a cleaner environment,  but also job creation, skills development and modernization of Kenyan industries.  NCBA recognizes this importance and is committed to financing these sustainable mobility solutions.  NCBA  asset finance is leading the way by pioneering EV financing in Kenya.

Building on this momentum, NCBA’s Group Director, asset finance  and  business solutions, Lennox Mugambi, participated in a panel discussion on e-mobility credit lines at the E – Mobility 2023 Stakeholders’ Conference themed ‘Powering E-mobility in Kenya’. The conference highlighted the growing e-mobility trend in Kenya, with increased investment in electric bikes, engines and charging infrastructure by both private and public entities. NCBA  is  also  sponsoring   this year’s e-Mobility conference themed  : “Accelerating the Adoption of Electric Mobility in Kenya.”

With Kenya striving to achieve its target of  five  percent electric vehicle registrations by 2025, NCBA’s role becomes even more critical. By staying at the forefront of e-mobility financing, NCBA is well-positioned to be a key driver in Kenya’s transition to a sustainable transportation future.