FirstGroup builds on sustainability-linked loan package to finance electric buses

Image: First Bus

The new £150m hire purchase and asset finance package, led by Lloyds Bank, will support FirstGroup deliver its vision of a zero-emission UK bus fleet by 2035.

This target covers some 4,500 buses. FirstGroup is electrifying depots on a case-by-case basis and is aiming for full electrification in York, Norwich, Leicester and Hampshire by March.

With the new finance package, FirstGroup will be supported to purchase electric bus chassis. Lloyds Bank was the sole owner coordinator and sole green finance coordinator, with NatWest and Bank of America acting as participants in the facility.

The news comes just two months after FirstBus unveiled a joint venture with Hitachi, under which it will lease up to 1,000 electric bus batteries. NatWest supported this project with a £96m syndicated loan facility.

Both of these finance packages build upon a £300m sustainability-linked loan agreed by FirstGroup in 2021. This loan sees FirstGroup receiving preferential interest rates if it meets or exceeds its targets to reduce emissions intensity across all scopes, and delivers its plans for adding zero-emissions buses to time. Lloyds Bank was the joint ESG coordinator on the loan issuance.

You can read more about First Bus’s EV transition in this recent interview feature from edie by clicking here.

Low-carbon journeys

In related news, the UK’s largest train operator has this week launched a roadmap to net-zero energy by 2050.

Govia Thameslink Railway’s (GTR) plans include ending the use of diesel trains, which currently account for some 3% of is services. It is weighing up whether to electrify sections of track or introduce battery-powered trains.

Efforts will also be made to increase renewable energy generation and procurement, both to serve the electrified trains and tracks and to power buildings and other infrastructure.

GTR already procures electricity for all depots, offices and stations that is backed with renewable guarantees of origin certificates. It is seeking to expand self-generation with rooftop solar on train depots, from 6,000 panels already in operation.

On heating, all buildings and depots currently fitted with gas-fired heating will be transitioned to ground-source heat pumps.

Energy efficiency is highlighted as another key focus, alongside changing energy sources. GTR’s plans include a smart meter rollout and an upgrade programme for air conditioning systems to this end.