Investors in electric buses are urging greater flexibility in financing to accelerate Rwanda's transition to electric buses, after the government launched a new climate financing strategy aimed at closing a $6.5 billion climate financing gap by 2030.
The strategy, set to be implemented from 2024 to 2027, was introduced by the Ministry of Finance and Economic Planning (MINECOFIN) on October 17. A new Climate Finance Department has been established within the ministry to facilitate the plan's execution.
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One of the primary sectors in need of climate finance is green transport.
Rwanda aims to convert 20% of its public transport to electric vehicles by 2030, a transition that requires $1 billion, which includes investment in the supporting infrastructure.
The transport sector currently accounts for 13% of the country&039;s emissions, with over 40% of those emissions coming from buses. Switching to green transport could reduce emissions by 72,000 tonnes of carbon.
Godfrey Nkusi, Managing Director of RITCO, a public-private partnership transport company, shared plans to fully transition their fleet to electric buses within the next five years. The company recently acquired two electric intercity buses.
"We currently have 167 buses, and our goal is to go green. Electric buses are cost-effective in the long term, but they require strong partnerships to ensure financing flexibility and product reliability," Nkusi said. "There’s also a need for technical expertise in maintaining and operating these vehicles."
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Nkusi emphasises the importance of training drivers and mechanics for electric buses and adapting the vehicles to Rwanda’s varied road topography. He also pointed out the need for infrastructure, particularly charging stations for electric buses, which are not yet widely available.
Scaling Electric Bus Investment
Grey Shen, CEO of Yutong, the world&039;s largest manufacturer of large and medium-sized buses, confirmed plans to continue supplying electric buses to the Rwandan market. Yutong recently started delivering electric buses to RITCO.
"Rwanda is a safe and clean country, making it an ideal market for electric buses. We are ready to meet the demand with both diesel and electric buses for intercity and long-distance routes. Last year, we had 200 buses in Rwanda; this year, that number has grown to 500," Shen noted.
Luis Wang, an expert in electric bus spare parts, stressed the importance of training technicians to ensure the sustainability of electric vehicles.
"As more electric buses enter the market, we must also train drivers and mechanics while importing essential spare parts," Wang said.
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Incentives and Investments
Doreen Orishaba, Rwanda’s Managing Director at BasiGo—an electric mobility company providing electric buses as a competitive alternative to diesel—praised Rwanda’s supportive policies, such as electric vehicle incentives, which helped attract their investment.
"Hearing about this new climate strategy, we’re optimistic about even more government support that will continue to make Rwanda an attractive market for investors like us," Orishaba remarked.
BasiGo has also benefited from Ireme Invest, a Rwandan green investment facility that supports projects in clean energy, smart mobility, and climate-smart agriculture, among others.
Tesi Rusagara, Minister of State for Public Investments and Resource Mobilization at MINECOFIN, explained that the climate finance strategy will facilitate investments in electric vehicles through financial de-risking support to banks, lowering the barriers for green businesses.
"We need to explore new financing avenues, support public and private sector investments, and introduce incentives to promote climate investments in the private sector," Rusagara said.
The strategy leverages a combination of public, private, and international financing mechanisms—including green bonds, carbon markets, and blended finance—to fund climate and nature-related initiatives.
Teddy Mugabo, CEO of the Rwanda Green Fund, stressed the importance of de-risking climate financing to encourage private sector participation in the green transport sector.
The introduction of electric buses, passenger vehicles, and motorcycles could cut transport fuel imports and harmful emissions at an estimated cost of $900 million.
Currently, there are about 7,000 electric vehicles in Rwanda. Incentives such as tax exemptions on electric vehicles, spare parts, and charging equipment, as well as the provision of government land for charging stations, have been introduced to ease the investment process.
The shift to electric vehicles is expected to bring significant benefits, including a reduction in maintenance costs, a decrease in gas emissions by 17%, and a reduction in oil imports by 15% annually, helping to stabilise Rwanda’s balance of payments.
However, initial purchase costs remain a barrier to widespread adoption, as does the lack of sufficient charging infrastructure. The decision to purchase electric vehicles is often tied to consumers' ability to charge them conveniently.