US embassy, firm to boost transition to e-mobility
Enterprise
By
Nanjinia Wamuswa
| Aug 14, 2024
The United States (US) and asset financier Mogo have reaffirmed their commitment to supporting Kenya's efforts in transitioning to electric mobility (e-mobility) as a shared priority.
US Ambassador to Kenya Meg Whitman, who visited Mogo's electric vehicle (EV) showroom in Nairobi on Monday, praised Kenya's progress in decarbonising its transport sector.
Mogo, East Africa's asset financier, is one of three e-mobility companies that have collectively received $30 million (Sh3.9 billion) in financing from the US International Development Finance Corporation (DFC).
The firm has invested Sh1.3 billion of this funding into expanding its EV financing portfolio, supporting Kenya's green mobility initiatives by providing essential zero-emission vehicle financing to individuals and businesses in the transportation sector. The firm is concentrating on financing e-bikes and three-wheelers, making various EV brands accessible to Kenyans.
"Investing in electric vehicles and motorcycles benefits Kenya in multiple ways. These investments create high-quality jobs for Kenyans in a growing industry, and they are part of an overall strategy to reduce dependence on fossil fuels, modernise the country's extensive transport system, especially in urban areas, and address growing climate crisis concerns," noted Whitman.
Electric vehicles enable boda boda operators to earn at least Sh300 more daily compared to those using fossil fuel motorcycles. This increase in earnings stems from cost savings on fuel and maintenance, combined with lower interest rates offered by Mogo for electric boda bodas. Most popular electric bodas use a battery-swapping model, allowing for quick exchanges of empty batteries for fully charged ones within minutes.
"There are multiple factors that Kenya and Sub-Saharan Africa face generally but most crucially affordability is a key barrier to achieving e-mobility, and that is where we come in as Mogo. By investing in e-mobility, we aim to not only expand access to economically empower Kenya's fast-growing MSME sector but also mitigate the impacts of global warming by reducing greenhouse gas emissions," said Mogo Africa and Asia chief executive Tomas Sudnius.
The transportation sector, primarily driven by fossil fuels, contributes significantly to the country's emissions.
Over the past five years, Mogo has lent out Sh20 billion for boda boda and motor vehicle loans, providing affordable financial products to more than 120,000 Kenyans. [Nanjinia Wamuswa]
E-mobility aligns with Kenya's National Climate Change Action Plan (NCCAP) 2023-2027, Long-Term Low Emission Development Strategy (LT-LEDS) 2022-2050, and Nationally Determined Contribution to reduce greenhouse gas emissions by 32 per cent by 2030.
The NCCAP identifies the uptake of EVs as a key climate action in the transport and energy sectors. The government envisions that by 2025, at least five per cent of all registered vehicles in Kenya will be electric. According to the State's statistics, Kenya's grid capacity is sufficient to support e-mobility.
The State has pledged to support the acquisition of electric motorcycles, aiming for 200,000 units by the end of 2024. The United Nations Environment Programme estimates that a global transition to electric motorcycles could prevent 11 billion tonnes of carbon dioxide emissions by 2050, saving motorcycle owners a combined Sh50 trillion ($350 billion) due to lower fuel and maintenance costs.