- Sector : Urban Development Solutions
- Location : South Africa
Overview
SCF providing technical assistance to an innovative project in South Africa aimed at decarbonizing the minibus taxi (MBT) industry through the introduction of electric minibus taxis (e-MBT) and the development of supporting charging infrastructure.
With a GDP of $377.8 billion, South Africa is the largest economy in Africa. At the same time, it is also among the top 15 global greenhouse gas (GHG) emitters due to its heavy dependence on fossil fuels, with the energy sector accounting for roughly 80% of its emissions. This has significant consequences for the climate and poses major health risks to the population. Furthermore, rising fuel prices have driven up MBT fares, which disproportionately impacts lower-income groups in the country.
The Government of South Africa has introduced several climate initiatives, including the Presidential Climate Commission, carbon taxation, and the Just Transition Framework. Given that South Africa’s transport sector accounts for 11% of national emissions, it plays a crucial role in achieving a “just transition” that safeguards workers and communities during the country’s shift to a zero-carbon economy.
By rolling out e-MBTs and creating designated charging stations, this project aims to:
- Substantially reduce the climate impact of MBT operations
- Improve public health and safety across South Africa
- Enhance the affordability and profitability of MBT services
The Challenge
Although the MBT industry accounts for 80% of public transport trips in South Africa, it emits approximately 13.5 million kilograms of CO2 daily which contributes significantly to climate change, while other pollutants such as particulate matter (PM) and nitrogen oxides (NOx) pose serious risks to public health. Although decarbonizing the MBT industry is a top priority in South Africa, there have been no significant efforts to address the sector’s environmental impact.
Additionally, transitioning to electric vehicles involves substantial initial investments for both fleet owners and infrastructure developers. Many MBT operators, often operating on tight margins, may struggle to afford the costs associated with adopting e-MBTs and related charging facilities.
The company that implements this project addresses these challenges with a lease-to-own business model. MBT owners lease e-MBTs on a monthly basis for a fixed term, while a separate lease covers battery packs, access to charging infrastructure, and maintenance services. Under this framework, the company operates as the vehicle supplier, maintenance provider, and infrastructure developer, generating revenue through e-MBT leases, battery pack leases, and charging infrastructure fees. This integrated approach aims to decarbonize the MBT sector while ensuring affordability and operational efficiency.
SCF’s Involvement – Technical Assistance
SCF is supporting the potential investee developing an electric minibus taxi (e-MBT) model in South Africa through a phased technical assistance programme, progressing from pre-feasibility to full feasibility to strengthen climate impact, market viability, and investor readiness.
The pre-feasibility study assessed how operations can be climate-positive and financially viable, including mapping renewable energy suppliers, evaluating the economics of sourcing green electricity for charging, and defining an optimal energy sourcing and charging strategy that balances climate impact, energy security, and affordability.
The feasibility study builds on earlier technical assessments to advance the project toward bankability and scale, with a focus on:
- Investor readiness: refining the business plan and SPV rollout model; developing corporate structure and governance; preparing initial financial statements and reporting systems aligned with investor standards; reviewing capacity needs; and mapping financing options (equity, debt, blended finance, guarantees) aligned with Just Energy Transition frameworks.
- Market assessment in Cape Town: analysing commuter affordability; assessing operator economics under a lease-based e-MBT model versus ICE MBTs; evaluating demand at rank and route level; identifying barriers and enablers to adoption; and conducting stakeholder consultations with taxi associations, commuters, local authorities, and energy providers.
These studies are an important steppingstone in unlocking the potential environmental, social, and commercial benefits of scaling up e-MBT adoption in South Africa.
Our Target Impact
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SDG 5 Gender Equality
The company promotes gender equity by empowering women to participate in the MBT sector and ensuring safer commuting for women and children
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SDG 8 Decent Work and Economic Growth
Operational savings of 40-70% from e-MBTs enhance the profitability of the MBT sector, addressing high fuel costs that currently inflate fares
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SDG 11 Sustainable Cities and Communities
The company aims to create a zero-emission urban transport system by building charging facilities in key cities and collaborating with local stakeholders for effective EV integration
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SDG 13 Climate Action
A single internal combustion engine (ICE) MBT emits approximately 54.2 kg of CO2 daily. With 250,000 MBTs nationwide, this totals 13.5 million kg of CO2 emissions per day. e-MBTs, as such, produce zero tailpipe emissions
