A groundbreaking partnership has been formed between the UK Infrastructure Bank, Rock Rail, and Aviva, through its capital unit Aviva Capital Partners, to establish a new funding platform for zero emission bus financier, Rock Road.
This partnership, alongside a debt facility from the UK Infrastructure Bank and HSBC UK, has committed an initial £100m to finance up to 250 zero emission buses and their associated infrastructure.
Rock Road offers a finance solution for UK bus operators and public transport authorities to decarbonize their fleets, while minimizing capital outlay and outsourcing key ownership risks around residual value and battery replacement.
The partnership aims to create a scalable funding model to accelerate fleet decarbonization, attract further private capital, and reduce reliance on public funding.
The partnership has already secured its first deal to finance 60 battery-electric buses, which will be leased to The Go-Ahead Group for deployment on routes throughout London, contributing to the reduction of carbon emissions and improvement of air quality in the capital.
The Rock Road platform, jointly owned by Rock Rail and Aviva, leverages the extensive experience and strong alignment of investment principles of both organizations.
Rock Rail brings its experience in the rail sector to deploy a proven funding model that attracts long-term institutional capital and supports the introduction of bus franchising.
Aviva’s participation is essential to the development of Rock Road in the short term and the mobilization of further private capital in the future.
The UK Infrastructure Bank has identified zero emission buses as a key investment sector for achieving net zero in its recent strategic update.
The Bank is providing £50m in debt financing to the platform, aligning with its mission to tackle climate change and boost regional growth.
HSBC UK is also providing debt finance to support the development of the Rock Road partnership.
John Flint, CEO of the UK Infrastructure Bank, highlighted the importance of replacing diesel buses with cleaner alternatives to decarbonize the transport sector and achieve UK net zero targets, emphasizing the need for a significant scale-up of investment.
He praised the Bank’s financing for helping to bring the innovative Rock Road leasing platform to the market, which will reduce costs for operators and facilitate the uptake of zero emission buses across the UK.
Charlotte Jones, Chief Financial Officer at Aviva, expressed Aviva’s commitment to investing across the UK to stimulate growth, prepare communities for the future, and support the transition to net zero.
She highlighted how this investment will facilitate the decarbonization of transport networks while maintaining valuable public services.
Mark Swindell, CEO of Rock Rail, expressed delight in working with Aviva, the UK Infrastructure Bank, and HSBC UK to invest in decarbonizing bus networks across the UK.
He emphasized the support for passenger transport authorities and operators to transform the regularity, punctuality, and reliability of bus services.
Anthony Browne MP, Decarbonisation Minister, praised the partnership for making it easier and quicker for operators to decarbonize their bus fleets.
He highlighted the commitment to provide £100 million in funding for 250 new electric buses, which comes shortly after a £143 million investment to roll out almost a thousand zero-emission buses across England.
