OX secures a $163 million contract

From the newsletter

A UK-based e-mobility startup, OX Delivers, has signed a $163 million deal to establish its first franchise in East Africa, OX East Africa. The company has been designing and supplying electric trucks for agricultural transport solutions in Rwanda. The franchise seeks to expand the company's presence to Uganda, Kenya, Tanzania, and Burundi.

• This development follows the company's receipt of $2.1 million from the Energy and Environment Partnership Trust Fund Africa this year. The funds will be used to deploy eight purpose-built e-trucks and establish a depot in Rwanda.

• At the same time, the Rwandan Ministry of Infrastructure (MININFRA) is developing its master plan for EV infrastructure, which aims to install EV charging stations across the country at 50 km intervals to address range anxiety concerns.

More details

• Africa's agricultural sector, the continent's largest employer—accounting for roughly 42.5% of total employment—suffers immense postharvest losses, with 30% to 50% of produced food lost due to inadequate transportation and storage, with small-scale farmers, who are the majority, suffering the most. Solving this problem is becoming a key target, and OX Delivers is attempting to address it.

• OX Delivers has already made a significant impact in Rwanda, supporting over 5,000 customers, primarily smallholder farmers and traders. Its "transport-as-a-service" model provides end-to-end infrastructure, including access to a technology platform that allows entrepreneurs to trade reliably and monitor vehicle maintenance. The company also plans to introduce new technologies, such as payment apps, to further enhance the customer experience. OX Delivers' transport service enables customers to book the space they need on an e-truck and their goods are collected and transported to the market in just a few hours. The impact is already evident in Rwanda, where some customers have seen their sales increase fivefold.

• Expanding into East Africa is a strategic move for OX Delivers. This region relies heavily on agriculture, and its predominantly small-scale farmers face significant hurdles in reaching markets due to poor road infrastructure. Existing transportation options, such as motorbikes, are often unsuitable for delicate produce like tomatoes or bulky goods.

• Fortunately, East Africa is embracing e-mobility. Rwanda has been a pioneer in implementing EV-friendly policies, including banning fuel motorcycles. Ethiopia has followed suit by banning fuel vehicle imports altogether, while Kenya offers lower tariffs for EV charging.

• While charging infrastructure remains a challenge, it is steadily improving. Rwanda and Uganda are planning to establish EV charging stations at 50km and 150km intervals, respectively. Kenya wants to set up charging networks along its major highways. Burundi is playing catch up, and this month advertised a consultancy opportunity to develop its national e-mobility policy. Although the power grids can be unreliable, the region's abundant solar resources offer a viable alternative, especially in rural areas. Underutilised mini-grids also present an opportunity; EV charging for trucks can boost their consumption and generate more revenue for the mini-grid operators.

• The benefits of this transition extend beyond just economics. As a region severely affected by climate change, East Africa stands to gain significantly from the reduced emissions offered by sustainable transportation.

Our take

• The need for efficient transportation in Africa's agricultural sector is significant. Faster and more effective transport can substantially reduce postharvest losses. Customised vehicle designs tailored to the African context can be particularly effective. The potential for scalability is high, as the market has barely attracted players who design transport solutions specifically for this sector.

• One key advantage of using e-trucks for transportation is the opportunity for aggregation. Farmers from different regions can combine their produce and transport it to market at once, saving both time and money. Farmers can utilise the time saved to focus on increasing production and the money saved to expand their farms.