FirstGroup secures £150m green financing to support the purchase of electric bus bodies

FirstGroup announces it has signed a new £150m Green Hire Purchase Financing Facility with a syndicate of three banks to support the purchase of electric bus bodies (FirstGroup specifies it means “the chassis and drivetrain, excluding the battery”).

This follows the strategic Joint Venture with Hitachi to purchase up to 1,000 electric bus batteries announced by the Group in November 2023. Within this deal, the two companies have established a 50:50 joint venture named NextGen AssetCo Limited, that will be responsible for purchasing up to 1,000 electric bus batteries valued at c.£100m, as part of First Bus’s expanding electric bus fleet.

FirstGroup secures financing for electric bus bodies

The Facility “provides the funding for electric bus bodies, net of any government co-funding received, and is available for drawdown over three years, on a competitive fixed margin plus basis.  Funding under the Facility will be provided in tenors of either seven or ten years depending on the specific requirement at the time for each batch of vehicle bodies to be financed”.

Whilst the total number of bus bodies to be financed will depend on a number of factors at the Group’s discretion, FirstGroup stresses, including forward curve pricing, the facility has been sized to support the purchase of up to 1,000 electric bus bodies and to broadly match the battery arrangements within the Hitachi Joint Venture.

Graham Sutherland, FirstGroup Chief Executive Officer said: “The innovative Green Hire Purchase Facility we have secured to support the purchase of electric buses represents another milestone for the Group. We continue to work hard to secure and optimise available funding to deliver on our First Bus decarbonisation commitment, build out adjacent electrification opportunities and create sustainable value for all our stakeholders.”