Electric bus transition requires private investment and improved bankability

The transition to electric bus systems faces significant hurdles due to high upfront costs and limited capacity. While electric buses can reduce urban emissions and improve air quality, development financing for sustainable urban transport and bus electrification currently represents a small portion of overall financing needs.

Recent international climate finance has prioritized the electrification of private vehicles, such as cars and two-wheelers, while less than 10% of such funding has been directed toward essential decarbonization strategies like buses or transit-oriented development. Shifting investment toward high-volume electric public transport is considered urgent due to its potential for broader benefits in urban livability and inclusion.

A new report, ‘Financing the E-Bus Transition: Improving Project Bankability and Enabling Scale’, aims to assist governments in making e-bus systems more financially attractive to investors by exploring various business models, financing tools, and risk-sharing approaches.