Rock Rail, the UK Infrastructure Bank, and insurer Aviva have collaborated to create a new funding platform aimed at financing zero-emission buses.
The initiative is supported by a debt facility from the UK Infrastructure Bank and HSBC UK.
Go deeper with GlobalData
It is committing an initial £100m to support the acquisition of up to 250 zero-emission buses and related infrastructure.
Rock Road, the beneficiary of this partnership, provides a finance solution tailored for UK bus operators and public transport authorities.
It is said to facilitate the decarbonisation of bus fleets while minimising capital expenditure and transferring key ownership risks such as residual value and battery replacement, away from the operators.
The partnership’s goal is to develop a scalable funding model that accelerates fleet decarbonisation and attracts additional private capital.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataThis, in turn, is expected to diminish the dependence on public funds for the transition to greener transport options.
The first transaction under this partnership involves financing 60 battery-electric buses to be leased to The Go-Ahead Group for operation across London.
According to the Financial Times, the cost disparity between electric and diesel buses is notable, with electric double-decker buses costing around £450,000, compared to £250,000 for a standard diesel bus.
Rock Rail CEO Mark Swindell has projected that the UK’s shift to a zero-emission bus fleet could require an investment of £10bn to £15bn, considering that only 2,000 of the nation’s 36,500 buses are currently electric.
The Rock Road platform, jointly owned by Rock Rail and Aviva, will benefit from £50m in debt financing from the UK Infrastructure Bank.
Additionally, HSBC UK’s debt finance contribution will further bolster the development of the Rock Road partnership.
UK Infrastructure Bank CEO John Flint said: “The vast majority of the UK’s 36,500 buses are still diesel-powered and so replacing these with a cleaner, greener alternative will be key in decarbonising the transport sector and achieving UK net-zero targets. This will require a massive scale-up of investment.
“The Bank’s financing has been crucial in helping to bring the innovative Rock Road leasing scheme to the market, which will reduce cost for operators and help improve the uptake of zero-emission buses across the UK.”
Last month, the UK Government announced a £143m investment to roll out nearly 1,000 zero-emission buses in England.
