NCBA launches charging station in Uganda

From the newsletter

NCBA Uganda has unveiled its first electric vehicle charging station at its main office in Nakasero. During the launch, the bank also introduced a Hyundai Kona EV into its fleet. The NCBA, the parent company of NCBA Uganda, has already installed three charging stations in Nairobi and one in Kigali. 

• In September 2024, NCBA acquired two hybrid electric vehicles (HEVs) from CFAO Mobility Kenya. The charging stations at its main offices in the region will be used to charge its growing fleet of EVs.

• NCBA operates in Kenya, Uganda, Tanzania, Rwanda, and Ivory Coast. The bank has been targeting increased lending to the e-mobility sector in the five markets in which it operates. In 2023, the lender announced a $15.5 million fund targeting customers looking to purchase personal and public electric vehicles.

More details

• NCBA is one of the largest banks in East Africa. Even as it builds charging stations and adds EVs to its fleet of vehicles, it is in EV asset financing that NCBA is making the biggest waves. This is key, as the lack of financing has been one of the driving factors of the slow uptake of EVs on the continent.

• The bank is part of the growing list of companies in various sectors on the continent that are transitioning part or all of their fleet to electric vehicles. For example, Kenya Power, Kenya’s main power utility, plans to invest $2 million to buy EVs and set up charging infrastructure.

• According to the United Nations Development Programme (UNDP), there is no dedicated capital source to help local and regional EV companies grow at the corporate level in Africa. Scaling and introduction of lower-cost debt finance into EVs will reduce the end-user cost and a source of certain financing will make it easier for operators to raise finance to scale in future.

• Further, there is a lack of dedicated project or asset finance sources to help scale necessary pilots and ancillary infrastructure. But innovative models such as pay-as-you-go and rent-to-own are making access to EVs easier. These financing models enable buyers who would otherwise have been locked out of buying EVs purchase them.

• EV firms on the continent are partnering with financiers to ease access to EVs. For example, Spiro, Africa’s largest EV manufacturer, this week partnered with BodaBoost, a Kenyan boda boda finance company, to introduce zero-interest financing for electric motorcycles in the country. The agreement will benefit the first 5,000 customers in Nairobi. Last year, Ghanaian EV startup Wahu Mobility and financial service provider Letshego also partnered to finance access to EVs. 

Our take

• The EV market in Africa is expected to grow significantly, with sales projected to reach 3.8-4.9 million units by 2040. Many African governments are introducing incentives such as tax exemptions and subsidies to promote EV adoption. The focus on innovative financing and supportive policies will likely drive higher adoption rates, making EVs a key player in Africa's green energy transition.

• Development finance institutions (DFIs) such as the International Finance Corporation (IFC) have been playing a critical role in supporting small businesses in Africa. This is through provision of long-term concessional loans to commercial banks in Africa for onward lending. As demand for EV financing grows, DFIs will play a bigger role in the e-mobility transition.

• Many African countries have neglected investments in charging infrastructure. However, some countries such as Ethiopia, Kenya, Zimbabwe and South Africa are moving to incentivize investment in chargers. To take e-mobility to the next stage of growth, African governments should reduce taxes on EV charging components to facilitate their faster deployment.