UK Infrastructure Bank Rock Rail, which has extensive experience in the rail sector, and Aviva Capital Partners have formed a partnership to provide a new funding platform for zero emission bus financier Rock Road. The partnership, alongside a debt facility from UK Infrastructure Bank and HSBC UK, is committing an initial £100m to fund up to 250 zero-emission buses and associated infrastructure.
Rock Road is able to offer a finance solution for bus operators and public transport authorities to decarbonise their fleet, while minimising capital outlay and outsourcing key ownership risks around residual value and battery replacement. The partnership is establishing a scalable funding model to accelerate fleet decarbonisation, crowd in further private capital and in turn, reduce the reliance on public money to fuel the transition.
The partnership says it has already signed its first deal to fund 60 battery-electric buses that will be leased to The Go-Ahead Group and deployed on routes throughout London. Rock Rail says its experience in the rail sector and ability to deploy a proven funding model that attracts long-term institutional capital makes it well-placed to support the introduction of bus franchising.
The UK Infrastructure Bank highlighted zero-emission buses as a key investment sector for net zero in its recent strategic update. The bank is providing £50m debt financing to the platform in line with its mission to tackle climate change and boost regional growth. HSBC UK is also providing debt finance which will further support the development of the Rock Road partnership.
John Flint, CEO of UK Infrastructure Bank, said: “The vast majority of the UK’s 36,500 buses are still diesel powered and so replacing these with a cleaner, greener alternative will be key in decarbonising the transport sector and achieving UK net zero targets. This will require a massive scale up of investment. The bank’s financing has been crucial in helping to bring the innovative Rock Road leasing scheme to the market, which will reduce cost for operators and help improve the uptake of zero-emission buses across the UK.”
Mark Swindell, CEO of Rock Rail, commented: “Rock Rail is delighted to be working with Aviva, the UK Infrastructure Bank and HSBC UK to invest in the decarbonisation of bus networks across the UK while supporting passenger transport authorities and bus operators to radically transform the regularity, punctuality and reliability of bus services.”
Decarbonisation Minister Anthony Browne MP added: “It’s fantastic to see Rock Rail, the UK Infrastructure Bank and Aviva join forces to make it easier and quicker for operators to decarbonise their bus fleets, with a commitment to provide £100 million in funding for 250 new electric buses.”
