An African electric mobility startup is seeking to make most motorbike taxis in Uganda’s capital city cleaner over the next five years.
Spiro, an e-bike and battery swapping provider, signed an agreement with the Ugandan government this week expected to spur the replacement of 140,000 emissions-spewing motorbikes with electric alternatives. The planned number of Spiro e-bikes would account for nearly 90% of Kampala’s registered taxis, known as boda-bodas, and more than the third of the country’s official fleet. Many more remain unregistered.
The company, formerly known as M Auto, already has a combined 4,500 electric motorbikes in Benin, Togo, and it’s about to deploy bikes in Rwanda.
“Our roll-out speed is proof that electric two-wheelers are the future of sustainable mobility in Africa,” Shegun Adjadi Bakari, Spiro’s chief executive officer, said in an interview. Verified boda-boda riders will be able to trade their traditional motorbikes for electric ones at no cost, Bakari said. The company will then earn revenue from swapping out batteries at its stations.
The Ugandan push will include the installation of 3,000 swapping and charging stations, he said.
Motorbike taxis are the main form of last-mile transportation in many African cities. High levels of urbanization and a young demographic present growth opportunities for two-wheeler electric vehicles on the continent. Over the last few years, Africa has caught the interest of a growing number of players including Zembo, which already provides electric boda-bodas in Uganda, and Kenyan-Swedish electric motorcycle manufacturer Roam.
“Africa is quickly joining the e-bike race but will still require dedicated efforts from governments across the continent especially from those we haven’t seen much movement from, yet,” said Amanda Welch, BloombergNEF grid and utilities analyst based in New York.
It’s on the strength of its government partnership that Spiro plans to build an e-bike assembly plant of about $15 million as part of its $200 million investment in the Ugandan market.
“Many countries are adopting policies on clean energy and Uganda cannot be left behind,” Minister of Works and Transport Edward Katumba Wamala said in his speech at the signing with Spiro. “The introduction of e-bikes is one step towards the right direction of greening and improving air quality in the country.”
There’s also an opportunity for companies like Spiro to sell carbon credits to a growing number of corporate buyers seeking to offset their greenhouse gas emissions. Offsets are promissory notes sold on a voluntary basis, where the seller will spend money replacing heavy fuels, for instance, and undertake to ensure that certain emissions are avoided or removed in the process.
Spiro closed a deal last year for a voluntary carbon market forward transaction with an estimated worth of $5 million over three years. Bakari thinks such deals could be worth even more with increased African regulation.
“Carbon markets can be mandatory or voluntary,” he said. “The only problem we are facing in Africa is that we only have a voluntary market.”
--With assistance from Fred Ojambo.
©2023 Bloomberg L.P.