Bogota has a very sophisticated bus transit system, which transports more than four million people per day. However, most of the buses run on diesel, which is responsible for significant greenhouse gas emissions. Currently, concessionary firms are not obliged to invest in electric or hybrid buses, and the main challenge is to motivate them to invest in more sustainable technology and avoid the increase of tariffs to the end-users.
The main barriers of electric and hybrid bus technologies include high upfront investments; technology is perceived to be high risk, especially in relation with batteries storage; and the limited number of suppliers that can provide local aftersales service. The battery system represents at least 50 per cent of the total cost of electric buses, and there is no market evidence that technology may last the estimated lifespan period.
In partnership with the Inter-American Development Bank (IDB), the Colombian National Development Bank (Findeter) and Bancoldex, BASE developed two green financing programmes to support private companies to shift investments from diesel to electric urban buses in the Colombian capital, Bogota.
BASE was commissioned to develop a financing strategy for the bus rapid transit system of Bogota, Colombia. This strategy aimed to make investments in hybrid and electric buses attractive enough to displace investments in conventional diesel buses. The strategy was based on comparative economic, financial, technology, and market analyses of the three different technologies. The final goal was to improve the return on investment of hybrid and electric buses compared to diesel ones, and thus motivate private bus companies to invest in more sustainable buses. Within the project three main mechanisms were identified which could improve the attractiveness of the hybrid and electric buses: 1) establishing a renting scheme on batteries (the technology element that presented the greatest risk for investors); 2) allowing advertising on buses (and thus profit from advertising space); 3) allowing delayed investments in diesel particulate filters in proportion to the hybrid/electric buses invested.
Under the district mobility policy, aspects related to road safety, coverage of the routes, increase of the system’s capacity and quality in the provision of the service were improved. The programme mobilised investment to reinforce the zonal and feeding component of the Sistema Integrado de Transporte Público (SITP). This made Bogota the city with the largest electric bus fleet in Latin America.
The first project introduced 100 per cent electric buses, to take the first step towards the use of zero-emission technologies in Bogotá’s public transporting system. The term of the concessions contract is 15 years for the supplier and 10 years for the operator, and, according to the schedules, it is foreseen that the fleet will gradually enter from the first half of 2020. As a result of the new financial mechanisms, 483 electric buses have been financed for the areas of Perdomo, Fontibón, Suba Centro and Usme.
