Electric Forklifts: Finnfund Lends Bisedge KSh 1.46B ($11.2M) to Grow Fleets in Kenya, Nigeria and TanzaniaElectric Forklifts: Finnfund Lends Bisedge KSh 1.46B ($11.2M) to Grow Fleets in Kenya, Nigeria and Tanzania

The loan backs a startup that supplies electric material handling equipment and logistics-as-a-service in Africa, and the report describes it as the first electric vehicle investment by the Finnish development financier on the continent. Finnfund did not disclose the tenor of the loan in the material seen by Mwenendo, and the fleet size was not stated.

What the financing is for

Bisedge will use the funds to grow its electric forklift fleets. Under a logistics-as-a-service model, customers pay to use equipment rather than buy it, which keeps the purchase cost off their balance sheets.

Christian Wessels, co-founder and chief executive of Bisedge, said: "Bisedge aspires to lead the transition to electric material handling in Africa".

Justin Nthala, a senior investment manager at Finnfund, said: "electrification of material handling equipment remains at an early stage in many markets".

The cost argument in Kenya

Warehouses and ports run forklifts for long hours, so fuel is a direct operating cost. EPRA lifted the maximum Nairobi price of diesel by KSh 9.90 ($0.08) to KSh 227.76 ($1.76) a litre for 15 October to 14 November, as Mwenendo earlier reported on the fuel price increase.

Electric equipment is charged from the grid, so its running costs depend on electricity tariffs instead of pump prices.

The source material does not say how Bisedge's rental prices compare with diesel forklifts, and Mwenendo has not seen cost data from the company. Whether the shift to electric equipment saves money will depend on electricity prices, reliability of supply and the rental terms customers accept.

A growing pool of development finance

Debt from a development financier gives a young company with equipment on its books a way to grow without selling more equity. As Mwenendo earlier reported, KenGen is courting more than 200 investors at its Olkaria conference in November, a sign of the appetite for energy-transition capital in Kenya.

For Bisedge, the next test is deployment: how quickly the new money turns into working machines in customer warehouses in the three countries. The company has not published targets in the material reviewed by Mwenendo.