FirstGroup, a private sector transport operator, has secured a £150 million green finance facility led by Lloyds Bank to add 1,000 zero-emission buses to its UK fleet network.
The Aberdeen-headquartered group is using the £150-million hire purchase asset finance package to buy electric bus chassis and progress the development of making its fleet net zero, which the firm aims to achieve by 2035.
This move comes after a joint venture with Hitachi in November 2023 to lease up to 1,000 electric bus batteries.
Lloyds Bank was the sole green finance coordinator and sole owner coordinator, with NatWest and Bank of America as funding participants in the facility.
NatWest signed up to the 12-year syndicated loan facility of £96 million to fund the bus batteries on a standalone basis, with the batteries then being leased to First Bus operating sites across the UK.
This most recent deal serves as an addition to the £300m syndicated sustainability-linked loan the firm gained in 2021, for which Lloyds Bank was the joint ESG coordinator.
The loan will see FirstGroup receive an interest rate adjustment based on meeting growth targets for its zero-emission bus fleet, and its ongoing reduction in combined scope 1, 2 and 3 emissions intensity.
The group currently aims to open four fully electric depots by March 2024, stationed in York, Norwich, Leicester and Hampshire.
Rod Pirie, group treasurer at FirstGroup, said: “Sustainability and transport decarbonisation are central to everything we’re trying to achieve here at FirstGroup. The team at Lloyds Bank share the same commitment, and their ongoing support is a big boost in helping us to implement our plans and get closer to our net zero targets.”
The popularity of fleet electrification
Electric vehicle (EV) companies from all over the UK have grown increasingly interested in the value of electrifying fleets and providing the infrastructure to support them. It is widely considered one of the most efficient methods of electrifying transport en masse.
January 2024 alone has seen ventures made by key industry players like Octopus Energy, which just announced its partnership with UK black cab app Gett to provide electric vehicle (EV) charging to 4,000 electric taxis.
The firm identified London’s black cabs as a key fleet demographic and therefore sees value in providing the charging infrastructure necessary.
January 2024 also saw the completion of waste collection company Veolia’s first trial in vehicle-to-grid (V2G) charging, which allows EV batteries to discharge surplus energy back into the grid.
Veolia currently plans to electrify all of its 1,800 Refuse Collection Vehicles (RCV) by 2040, which together will provide 200MW of daily flexible power capacity to the grid.