Kinetic gets $50m funding for electric buses

Publicly funded New Zealand Green Investment Finance (NZGIF) has signed a $50 million financing deal with Australasia’s largest bus transport operator Kinetic for e-buses. 

The capex facility will finance electric buses and associated infrastructure here and is part of a broader senior lending syndicate supporting Kinetic’s sustainability goals.

The company has plans to support local authorities in transitioning public bus fleets from diesel to battery electric and has already delivered over 150 electric buses to New Zealand streets in partnership with councils in Auckland, Wellington, Christchurch and Tauranga.

In January, Kinetic unveiled New Zealand’s first and Australasia’s largest fully electric bus depot in Auckland. The Panmure site is home to 35 electric buses, which are among 152 the company will deliver in partnership with Auckland Transport over the next two years.

The NZGIF facility will be used to accelerate the decarbonisation of New Zealand’s public transport fleet, and is enough to fund more than 150 zero-emission buses over the term of the facility. 

If fully drawn, the facility will help New Zealand avoid more than 100,000 tonnes of CO2 emissions over the life of the assets.

NZGIF chief executive Craig Weise says the deal is an important step for New Zealand’s public transport system.

“If New Zealand is going to meet its CO2 emissions reductions targets, we’re going to need to dramatically increase the number of low and zero-carbon emission buses on our roads.

“Only around 5% of public buses in New Zealand are electric at the moment, so there’s room for a huge improvement. The technology is readily available but, until now, financing for the New Zealand market just hasn’t been there.

“We were established precisely to help catalyse these sorts of deals, and to collaborate with other like-minded organisations to build a low carbon economy.

“It’s great to be working with Kinetic, which is not only the largest bus operator in Australasia but one of the fastest growing as well. 

“They’re already well established in New Zealand through their acquisitions of NZ Bus and Go Bus, and we’re excited to be working with them and the broader lending syndicate to help reduce public transport emissions,” Weise says. 

Kinetic co-chief executive Michael Sewards says the support of NZGIF recognised Kinetic’s strategic vision and sustainability goals.

“The strength of our lending syndicate recognises the evolution and diversification of the Kinetic platform across Australasia and our trusted partnerships with government regulators and regional councils to accelerate the decarbonisation of public transport,” Sewards says.

“In our experience New Zealand is leading the charge on the global stage on the transition to zero emission busing, and we’re prepared with adequate support to meet both community expectation and the government mandate for the full decarbonisation of urban buses in New Zealand by 2035.” 

Climate change minister James Shaw says the deal should fund another 150 zero-emission buses and associated infrastructure.

He points to warnings that urgent action is needed to mitigate climate change impacts.

About 203 electric buses were on New Zealand roads in January this year, the country having 2638 public transport buses at the end of last year.

NZGIF investments include solarZero to provide solar energy for homes, businesses and schools on an “as-a-service” basis so there is no upfront cost for solar panels and batteries, helping Tnue finance a new low-emissions fertiliser plant near Taupo, working with New Zealand Post to provide finance to help its contractors transition to electric vans, helping electrify public transport through investments in Zenobē as well as the new Kinetic investment, and finance to help CentrePort with decarbonisation projects, including replacing diesel container transfer vehicles with EVs.