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

To support and inform the development of this project, the SCF Technical Assistance is commissioning a pre-feasibility study covering three key areas:

• Environmental Impact: Measuring reductions in CO2, NOx, and SOx emissions and evaluating environmental and health benefits from e-MBT operations
• Social Impact: Assessing impacts and improvements in gender equity and social inclusion within the MBT industry
• Economic Impact: Evaluating the profitability of e-MBT services

This pre-feasibility study is an important steppingstone in unlocking the potential environmental, social, and commercial benefits of scaling up e-MBT adoption in South Africa.