In Third Derivative’s “Ecosystem Spotlight” series, learn about the people, ideas, and companies accelerating the clean future, together. Today, we’re featuring Jit Bhattacharya, CEO and co-founder of BasiGo, in Third Derivative’s Cohort 419.
Climate change is in the air in Nairobi, Kenya, literally.
“It is impossible to drive more than five minutes in Nairobi without directly experiencing the severe pollution from diesel emissions,” says Jit Bhattacharya.
Yet diesel buses still account for roughly 40% of annual passenger trips. The dearth of electric buses in the region is a problem for the climate, as well as for daily life, and Bhattacharya saw an opportunity—and fresh motivation—to solve it.
“Pull up behind any of the thousands of diesel buses and the moment the bus begins to move, your entire car is bathed in black soot,” he says. “In a car, you have the luxury of closing windows and breathing filtered air, but that same black diesel exhaust goes straight into the faces of the millions of pedestrians, children, and bus passengers waiting on the side of the road.”
While data on local air pollution is scarce, he says, many broader-based studies show an alarming correlation between fossil fuel emissions, including filtered diesel exhaust, and adverse health impacts like stroke, lung cancer, and respiratory disease.
Harvard researchers recently reported that the impact of fossil fuel combustion on human health has been grossly underestimated, now estimating that particulate air pollution from burning fossil fuel is responsible for one in five premature deaths.
Meanwhile a new Lancet report found that air pollution killed more than 1.8 million people globally in 2019 alone.
Still more than a million buses traverse the roads of Africa, with diesel buses gobbling up more than 1 billion liters of diesel fuel each year—despite the fact that diesel buses are expensive to fuel and maintain.
Meanwhile demand for transit is skyrocketing.
By 2100, 13 of the world’s 20 biggest megacities will be in Africa—as will more than a third of the world’s population. Bus electrification is sorely needed, but barriers like costs and battery concerns have stymied widespread adoption.
Every innovator needs an occasional break in the clouds to help illuminate a new opportunity for change. For Bhattacharya, that clearing came in spring 2020, when COVID-19 lockdowns offered the chance to see first-hand what cleaning up transit fleets would do for major cities like Nairobi and Kampala.
With almost all buses forced to stop operation for a number of days, the air cleared to a level that hadn’t been seen for decades in Nairobi. One morning, Bhattacharya woke to find everyone in the city sharing photos on social media of Mt. Kenya behind the city skyline.
It was the first time they’d been able to see it clearly in 30 years.
“Seeing how excited everyone was about the air being clean for a single day made me realize how desperately people wanted this problem to be solved. At that point, I knew we had to make inclusive, sustainable transit in the region a reality.”
With sights on electrifying bus transit in East Africa, Bhattacharya teamed up with former colleague Jonathan Green to launch BasiGo, which means Bus Go in a combination of Swahili and English.
As part of their early market research, the duo learned that electricity in East Africa is made up of over 70% renewable, with hydropower, geothermal, solar, and wind producing some of the cleanest, most affordable electricity in the world. This realization only added to their conviction that now was the time to electrify regional buses.
“What we don’t talk about enough is that we should prioritize electrification in regions of the world where the electricity is already green. Replacing diesel buses with electric in renewable-rich East Africa would reduce emissions immediately—rather than having to wait for renewables to be brought on to the grid in places like South Africa, for instance, which generates 87% of its electricity from coal.”
What’s more, nearly half of all buses produced globally are now electric, making them easier to find and more affordable than ever.
And thus, replacing a diesel bus with an electric one in East Africa can have a higher potential for impact than in other regions—while costing less for owners to operate.
But to unlock this potential, they needed to break down multiple barriers to the adoption and operation of electric buses in sub-Saharan Africa.
BasiGo’s key innovation is a battery subscription offering that separates the cost and charging of the EV battery from the cost of the bus—which allows owners to buy an e-bus for the same upfront cost as a diesel bus.
From there, innovative pay-as-you-go financing enables operators to pay a per-kilometer operating subscription, which costs less than current diesel fuel and maintenance rates.
Ultimately BasiGo gives bus operators an electric option that is more affordable, more convenient, and more reliable than diesel. It also creates an opportunity to reduce emissions by a long shot.
“Every electric bus we deploy in this market in place of a diesel bus reduces CO2e emissions by over 50 tons per year,” he says.
BasiGo’s EV finance model solves for many of the obstacles that have held East Africa back from bus electrification, but it needed an ecosystem approach to fulfill its potential.
Electric buses are expensive, after all, and the model requires serious capital to reach necessary economies of scale. But to raise more debt and equity, they must show operational performance and latent demand.
To gain the power of a global ecosystem of support, BasiGo applied for and was accepted into Third Derivative’s Cohort 419. Since then BasiGo’s seen strong interest out of COP26, with capital markets and donors alike seeking high climate-impact business models.
They’ve also secured a supply partnership with BYD to bring state-of-the-art e-buses into the local market, and have already received their first e-buses from China, with the chargers set to arrive shortly thereafter. And they’ve secured commitment from two of Nairobi’s largest bus operators as pilot partners.
“We knew that by joining D3, we would be connected to fellow entrepreneurs, mentors, and strategic partners who could help advise on and accelerate what we are trying to do.”
While BasiGo is still fairly new to the D3 ecosystem, they’ve already seen value from new connections, including identifying and gaining insight from similar business models in India.
Nairobi is Bhattacharya’s home, but he isn’t stopping with local buses.
“We envision a world where every commercial fleet vehicle in East Africa is powered by affordable renewable electricity rather than climate-warming petroleum fuels,” he says. “In that future, we transform air quality in Africa’s rapidly growing cities as they become leaders in the new sustainable economy.”
For other startups out there, he offers this advice:
“There is a focus on climate impact like I have never seen before. So have urgency and think big—because the planet needs it, and investors want to see it.”