Investing in Electric Bus Deployment in Latin America

Investing in electric
bus deployment in
Latin America
Overview of opportunity and
market readiness
July 2020
Funder & Implementing Supporting Prepared By

Facilitator Partners Partners
INTRODUCTION
Abstract & Authors

ABSTRACT AUTHORS & CONTRIBUTORS
This report was developed by Dalberg, C40 Cities: ICCT: Dalberg:

with guidance from the Zero Emission
Bus Rapid-Deployment Accelerator • Anthony Courreges • Ana Beatriz Rebouças • Sylvia Warren
(ZEBRA) Partnership teams at C40 Cities • Caroline Watson • Carlos Jiménez • Fabiola Salman
and the ICCT and support from P4G. The
report aims to assist the ZEBRA • Claire Markgraf • Carmen Araújo • Kusi Hornberger
Partnership with its goal of accelerating • Gabriel Oliveira • Kate Blumberg • Oren Ahoobim
the transition to zero emission buses
• Ilan Cuperstein • Leticia Pineda
across Latin American cities, by
highlighting the business case for e- • Manuel Olivera • Oscar Delgado P4G:
buses, the current state of the market and • Thomas Maltese • Ray Minjares • Sarbinder Singh
its potential for growth, with investment
synopses for five key cities: Bogotá,
Santiago, Mexico City, São Paulo and
Medellín. The report draws from
consultations with financiers, investors,
manufacturers, operators, city authorities
and experts in the region. The authors
greatly acknowledge and thank all those
that have helped the conception of this
report.
2
Funder & Facilitator Implementing Partners Prepared By
INTRODUCTION
The ZEBRA partnership is accelerating e-bus scale-up

FUNDER & FACILITATOR SUPPORTING PARTNERS
Provides a global network of innovators,

investors, and others seeking
breakthroughs in green economic growth,
supported national platforms that secure
political commitment to local projects. Has ~40 years of in viable climate Brings finance expertise to
Funds and facilitates ZEBRA to solutions, including recent supports sustainable investment
accomplish its mission. electric bus projects across Latin in its member countries. Will
American cities. Will support to support the design of a
channel investments from streamlined process for
IMPLEMENTING PARTNERS development financiers under a project preparation advisory
project-based approach. services and the mobilisation
of GCF finance.
Has ~15 years of experience and
technical expertise focused on
improving the environmental and energy
performance of the transportation
sector, including public transport. Leads
the technical aspects of ZEBRA.
Works to develop local capacities Accelerates investments in
in Latin America to address air cost-effective distributed
pollution and climate change and energy solutions to open the
Has long-standing relationships and provides technical support to clean energy economy. Will
support from 96 cities committed to countries, such as Chile. Supports support engagement of
tackling climate change—and helped the work in Santiago, Chile and utilities through the
spark the current transition towards e- brings technical expertise to development of alternative
buses in Latin America. Leads the other cities. financing under a pay-as-you-
finance and Political aspects of ZEBRA. save (PAYS) model.
3
SUMMARY
THE OPPORTUNITY
CITY INVESTMENT SYNOPSES

Santiago
Bogota
Mexico City
Sao Paulo
Medellin
INVESTMENT PIPELINE
ADDITIONAL MATERIALS
THE OPPORTUNITY
A market transition is underway in Latin America
Scale-up of electric buses across Latin America1

Illustration of progress …Santiago and
Bogota are
…Medellin, Mexico integrating up to
City, and Sao ~6,000 e-buses
The 10+ largest Paulo each have via large-scale
…Buenos Aires,
cities in Latin 50+ e-buses in tender processes
Lima, Quito, and
America have Salvador are their public
made or acted on transport systems…
testing e-bus
commitments to technologies…
transition to e-
buses…
Commitment Pilot Early scale-up Commercial scale
Electric buses are in early phase of scale-up and poised for future growth
Notes: 1. “Electric bus” includes battery-electric buses and trolley buses. 5

THE OPPORTUNITY
Environmental, health, and economic factors are driving

change
Diesel buses account for E-buses can help address The total cost of ownership
25% of black carbon the global air pollution (TCO) of an e-bus can be
emitted in cities, which has crisis: nine out of ten equal or less than that of
a warming impact 900 to people today breathe air a diesel bus, given ongoing
3,200 times that of considered unhealthy by savings in fuel and
carbon dioxide1 the World Health maintenance3
Organization (WHO)2
Notes: 1. ICCT, “Financing the Transition to Soot-Free Urban Bus Fleets in 20 Megacities,” 2017. 2. WHO,
“How air pollution is destroying our health,” accessed 2019. 3. ZEBRA, “Accelerating a market transition in
Latin America: New business models for electric bus deployment,” 2020 6
THE OPPORTUNITY
For 2020-2022, the Latin America e-bus market exceeds

USD 1 billion
Market potential for select cities in Latin America1
USD millions and # of buses, 2020-2022
$100 $1,345
$650
$70
$220
$50 $15
$240
Bogota Guadalajara Medellin Mexico City Salvador Santiago Sao Paulo Total
~1,000 ~100 ~100 ~400 ~200 ~2,100 ~420 ~4,400
buses buses buses buses buses buses buses buses
Notes: 1. Analysis is based on ZEBRA knowledge of upcoming new contracts (e.g., tender processes) and city and
operator plans to transition to e-buses within existing contracts. The analysis considers different sizes, models, and
prices of buses across cities. 7
THE OPPORTUNITY
ZEBRA is working to mobilize USD 1 billion through new

financing models
Lever
• New players (e.g., capital funds, electric utility companies)
come into the bus sector to buy e-bus assets and lease them to
Asset traditional operators to use
ownership • Allows for sharing of costs (i.e., the operator not cover all
upfront costs) and the sharing of risk (e.g., traditional asset
owners take on less technology and financial risk)
• Development finance institutions (DFIs) provide attractive
financing terms to enable purchase of e-buses:
Sources and
o Lower interest rates
terms of o Extended payment periods (e.g., 10+ years)
financing o Grace periods (e.g., two years)
• DFIs can show proof-of-concept to replicate and scale
These two levers can be used to create a range of viable financing models
8
THE OPPORTUNITY
E-bus projects offer a strong business case
TYPE OF BUS PROJECT-LEVEL IRRS1
• These IRRs are consistent with the level

ELECTRIC • 9-18%, depending on the market of risk of e-bus projects
BUS
• Some cities are structuring contracts
with a set IRR for investors, for • These IRRs are based on existing tariffs
example: and subsidies; there is no impact for
passengers
– Bogotá aims to deliver 12%
– Santiago is considering 9% • For many operators, e-buses are
competitive with diesel
• For other cities, project-level IRRs are
highly sensitive to bus cost and fleet • However, financial estimates vary
provision payments considerably based on inputs and
assumptions (e.g., fleet provision costs)
DIESEL • <10%, depending on the market
BUS
ZEBRA has developed a dynamic tool to estimate financials for specific projects2
Notes: 1. These estimates are based on conversations with investors and the current financial model. The model is being constantly
updated to reflect the rapidly-changing environment; as such, the estimates are likely to fluctuate with time. 2. To use this tool, please 9
contact ZEBRA at [email protected].
THE OPPORTUNITY
And there is growing demand for financing at city level
Summary of completed transactions and pipeline

# of buses, 2015-present
• Santiago – 410 buses
• Bogota – 483 buses
• Medellin – 68 buses
Completed ~1,060 • Mexico City – 63 trolley buses
• Sao Paulo – 16 buses
• Montevideo – 20 buses
• Santiago – up to ~4,300 buses, 365

• Bogota – at least 631, up to ~2,000
In progress ~6,800 • Mexico City – ~130 trolley buses
• Panama City – 35 buses
• Sao Paulo – up to 100 buses

• Salvador – up to 206 buses
• Cali – up to 106 buses
Early stage ~780
• Mexico City – up to 300 trolley buses
• Quito – up to 70 buses
• Medellin – TBC
Notes: 1. This summarizes key transactions with over 15 buses but is not exhaustive.
10
THE OPPORTUNITY
To date, several institutions have committed financing
EXAMPLE: Celsia in Bogota

• Celsia is a Colombian energy company also
active in Panama, Honduras, and Costa Rica
• In 2019, Celsia won a tender to provide 120 BYD
buses to SITP in Bogota
• They invested USD ~30 million in equity,
through a subsidiary company (Empresa de
Energía del Pacífico S.A.)
• Celsia will now rent the buses to operators
• Celsia plans to expand to other markets
Through the signing of an “investor

declaration,” ZEBRA aims to secure more
commitments from investors that provide a
critical market signal to cities,
manufacturers, and operators
11
THE OPPORTUNITY
ZEBRA offers dedicated support to these investor

partners
Visibility Partnerships Knowledge
ZEBRA recognizes and ZEBRA aims to connect ZEBRA actively shares

directs positive attention to investor partners to concrete updates related to city-
its investor partners at the opportunities and to facilitate level projects, tenders, and
municipal, national, dialogue with city officials, events as well as broader
regional levels operators, manufacturers, and national and regional
each other trends
12
SUMMARY
THE OPPORTUNITY

Santiago
Bogota
Mexico City
Sao Paulo
Medellin
INVESTMENT PIPELINE
MARKET OVERVIEW
Our analysis focused on five public transport systems in five cities
Santiago Red Metropolitana de Movilidad (RED) ~6,800 buses
Bogota Sistema Integrado de Transporte Público (SITP) ~8,000 buses
Sao Paulo SPTrans ~14,200 buses
Mexico City Metrobus ~700 buses
Medellin Transporte Público Colectivo (TPC) ~6,400 buses
14
MARKET POTENTIAL
The market size across these five systems will double to over USD 1200M by 2030
Market potential for electric buses2

USD millions, 2020-2030
$1250
750
Sao Paulo SPTrans • Santiago and Bogota account for ~90%
700
Mexico City Metrobus of the market for 2020-2022
650
Medellín TPC
600
Bogota SITP
$515
• Sao Paulo will grow to dominate the
550 $514
Santiago RED $480 market by 2030
500
450 $426
400 $376 $366 • Opportunities in Medellin Transporte

350
$323 $326 $322 Público Colectivo and Mexico City
$298
300
Metrobus will increase steadily
250
200 • Key drivers of market size:
150 – # of buses renovated per year
100 – % of buses procured that are electric
50 – Average price of assets
0
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
15
MARKET READINESS
Santiago and Bogota have the most mature markets
POLICY TECHNOLOGY FINANCE
Santiago RED
Bogota SITP
Mexico City Metrobus
Sao Paulo SPTrans
Medellin TPC
16
MARKET READINESS
Concession structure and electromobility policies/laws underpin readiness
POLICY
• National Electric Mobility Strategy (2017), Electric

Santiago RED
Roadmap 2018-2022, Energy Efficiency Law in progress
• Strong support from new city government, National Law

Bogota SITP
1964, and 2020 tenders with incentives for e-buses
• City government is developing a 2020-2026 Climate

Change Program
• Sao Paulo has set pollution reduction targets via

Sao Paulo SPTrans
amendments to 2009 Climate Change Law
• National Law 1964 mandates 10% vehicle electrification

Medellin TPC
by 2025 and 100% by 2035
Committed to procure only zero-

emission buses after 2025 via C40
Green and Health Streets Declaration
17
MARKET READINESS
Technologies have been tested and local supply is expanding in most markets
TECHNOLOGY
• Supply is expanding: three manufacturers have closed

Santiago RED
transactions, and two others are testing buses
Bogota SITP • BYD is market leader, with >5 other suppliers exploring
• Yutong leading with trolley buses, as Metrobus completes

technology assessments for e-bus specifications
• BYD and Eletra factories in Sao Paulo state for 12m and
Sao Paulo SPTrans
articulated e-buses
• Zhongtong has standardized 7.8m bus for Medellin

Medellin TPC
• BYD and Foton have local representation
18
MARKET READINESS
Concession structure and public guarantees have driven investor interest in Bogota and
Santiago
FINANCE
• 49 firms have bought the right to participate in the 2019/2020

Santiago RED
tender, support by strong public guarantees
• Many third-party asset owners and DFIs interested in market;

Bogota SITP
Ashmore and CELSIA won tenders
• Several third parties, including private transport and energy

companies, have expressed interest in asset ownership
• BNDES has attractive e-bus financing, with local content

Sao Paulo SPTrans
requirements
• Lack of guaranteed cash flows in TPC currently impedes

Medellin TPC
private investment
19
SUMMARY
THE OPPORTUNITY

Santiago
Bogota
Mexico City
Sao Paulo
Medellin
INVESTMENT PIPELINE
CITY INVESTMENT SYNOPSES >> SANTIAGO
SUMMARY OF OPPORTUNITY
Investment requirements SPV - equity SPV - debt Credit guarantee
Amount1 • 100-bus project (12m bus) – USD 30 million total investment

• 200-bus project (12m bus) – USD 60 million total investment
Commercial model Separation of all assets, through new contracts
Instrument Equity Debt; various levels of • Partial credit guarantee

seniority (50%)
Time horizon 10 years; shorter with exit or 5-10 years; shorter with exit • 5-10 years, depending on
re-financing or re-financing loan duration
Expected returns 9% target IRR (TBC) 8% APR, depending on loan 1% annual fee, depending on
agreement guarantee structure
Upcoming projects • RED fleet renewal, ~4,300 buses over 2020-2023
Notes: 1. Project size could vary.
21
OVERVIEW
The Red Metropolitana de Movilidad (RED)1 has >6,000 buses and is undergoing
a transition
Market share of business models

# of units, out of ~6,756 total
~6,400 ~4002
VERTICALLY- PRIVATE OPERATORS

INTEGRATED, PRIVATE WITH DIVIDED
OPERATORS RESPONSIBILITIES
RED is transitioning from a vertically-integrated model to divided responsibilities through new

concessions. This process has started with ~400 e-buses introduced through existing contracts and will be
formalized in the 2020-2020 tenders that will replace ~80 of the fleet.
The following slides focus on all operators in RED (formerly known as Transantiago)
Notes: 1. Transantiago was rebranded to RED. 2. Over 400 e-buses have been introduced to the market with
separated asset ownership (Engie, Enel X, NEoT own assets), within existing contracts. The entire RED system is
now moving toward this divided responsibility model for all new tenders.
22
MARKET POTENTIAL
RED has >$600M e-bus investment opportunity during 2020-2022
Market share of business models Overview of RED in Santiago - 2019

250 # OF BUSES • 6,756+ buses in 380 routes
$215 $215 $215
• Most buses are Euro III diesel
200
particulate filter (DPF) and V,
150 with a growing percentage of
Euro VI since 2018
100
$41 $45 $45 $45 $45 $45

50 $32 $36 # OF • ~3M average weekly
PASSENGERS transactions
0
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 • Projected to increase, but
Covid-19 has impacted
KEY DRIVERS: ridership
• Fleet renovation: ~4,300 units during 2020-2022,
followed by ~150 per year starting 20231
CONCESSION • Two separate tenders: one for
AGREEMENTS fleet suppliers and one for
• % of buses procured that are electric: ~50% for
2020-2022, increasing to 100% by 2026 per city operators3
target to have 100% zero emission fleet by 20352
• Bus cost: ~300K, on average, for 12m e-bus
Notes: 1. 80% of the fleet will be replaced 2020-2020 2. While unknown, there are signs that over 50% of 2020-2022 tenders could be
electric. Last diesel bus must be purchased in 2025 in order to have 100% zero emissions fleet by 2035, per city commitment. 3. Fleet supplier
tenders last 10 years for internal combustion engines and 14 years for battery electric buses (but buses must be replaced after 10 years).
Public transport operators (PTOs) lease buses via contracts for five years, which are extendable for up to an additional five years; If fleet is 23
Funder & Facilitator Implementing Partners Prepared By more than 50% electric, then PTOs can lease buses via contracts for seven years, which are extendable for up to an additional seven years.
MARKET READINESS
The government strongly supports e-buses and has a centralized system under DTPM
Policy – • Government commitments are strong: Santiago has committed to Key learnings to date
e-bus only procure zero-emission buses after 2025, via C40 Green and
commitment Healthy Streets Declaration, and the government aims to transition all
public transit fleets in Chile to zero emissions by 2040 • Strong public
• The Santiago government has led e-bus deployments through policy commitment has
action and motivating operators to use e-buses (e.g., providing translated to nearly 400
guarantees, providing incentives for e-buses) electric buses in operation
• Chile has a National Electric Mobility Strategy (2017), the Ministry of • Currently, DTPM is
Energy has an Electric Roadmap 2018-2022, and the government is modifying contracts and
developing an Energy Efficiency Law operations (i.e., limiting
the fleet size of each
operator, awarding
smaller contracts,
reducing responsibilities)
Policy – • DTPM, the public transport authority, manages central planning,
to reduce system risk
transport system including selection of routes, contracts, and hiring of services (i.e.,
organization operations, terminals, payment systems) and regulates and supervises and improve competition
the system (e.g., monitoring quality, applying fines) and efficiency
• Administrador Financiero de Transantiago (AFT) functions like a city-
level trust; it receives subsidies, collects payments, and distributes
payments to operators
24
MARKET READINESS
Enel-Metbus partnership is leading the shift towards e-buses in Santiago
Key learnings to date

Technology – • BYD currently leads the market with 285 buses; BYD supports Enel X
supply and Metbus, the operator, with maintenance, staff trainings, problem
diagnosis and resolution, and work orders for bus repairs • It is critical to have
• Yutong and King Long have also closed transactions route-level planning for
• Supply is expanding: Sunwin & Subus and BYD & Metbus have each e-bus specifications
piloted articulated bus; Alstom & Redbus have piloted one 12m bus (battery size, battery
• Centro Mario Molina and ZEBRA undertook a route-level modeling range, energy
study to identify the most suitable routes and define technical consumption)—given the
specifications for e-buses wide variation shown in
technical studies
• Several charging systems
Technology – • Enel X, in partnership with Metbus, invested ~USD $40 million in 102 are already being tested,
demand1 12m BYD buses, 100 chargers, and in building an electro-terminal and including fast chargers
recently procured an additional 183 buses from BYD to fully electrify and pantographs
Corredor Grecia (which became operational in October 2019)
• Engie invested in 100 Yutong ZK 6128 12m buses, in partnership with
two operators: STP Santiago (25 buses) and Buses Vule (75 buses)
• NEoT Capital, a French investment platform specialized in distributed
renewable energy and electric mobility, recently invested in 25 12m
King Long e-buses, with RedBusUrbano
Notes: 1. Outside RED, the Las Condes municipality bought 10 Yutong E8 buses for local transport
25
MARKET READINESS
Strong public guarantees have helped private investors enter the market

Financing – • Subsidy covers between 47-50% of all costs, with remaining costs
public covered by fares
• IDB may finance projects by providing loans to asset owners with
• There is widespread
government guarantees
international interest
• Banco Estado and CORFO have not yet been involved directly, but
could play a role
to enter the market as
• CORFO is also planning to finance an electric mobility center asset owners: 49 firms
have bought the right
to participate in the
2019/2020 tender1
Financing – • Energy companies Enel X and Engie have invested equity in 485
• E-bus costs—both with
private buses (chassis, battery, and charging stations)
• NEoT Green Mobility has invested in 25 buses (chassis and battery)
depot and opportunity
• Other private investors (e.g., Mitsui/Sumitomo, Société Générale) charging—are
are interested in asset provision consistently lower
than those of Euro VI
diesel buses, although
Financing – • DTPM guarantees leasing payments between Metbus and Enel the total cost of
guarantees through AFT, as stipulated in service provision contract ownership (TCO) varies
• Additional credit guarantees could come from national financial
institutions (e.g., Banco Estado, CORFO)
Notes: 1. RED, “Listado de Adquirentes,” 2019
26
E-BUS MODEL
The current model brings in utility companies to own assets
FOCUS INVESTMENT OPPORTUNITY
Fleet
provision Equity
payments investment
Special Purpose Other
AFT - Trust
Vehicle / asset owner investors
Guaranteed Loans or
cash flows lines of
credit
Central fare Public Fleet provision Commercial
collection
E-bus
transport contract
lenders
(Tarjeta bip!) assets
authority
Credit
guarantees
Operation
payments Development
Operators finance
institutions
Passengers
Does not currently exist Revenues

Financing
Do not currently play a role, but
could in the future Guarantee
27
E-BUS MODEL
The future RED tenders fully separate fleet ownership from fleet operation
Fleet
provision Equity
payments investment
Special Purpose Other
AFT - Trust
Vehicle / asset owner investors
Guaranteed Loans or
cash flows lines of
credit
Central fare Public Commercial
collection
Fleet provision E-bus
transport contract lenders
(Tarjeta bip!) assets
authority
Credit
guarantees
Operation
payments Development
Operators finance
institutions
Passengers

Financing
28
SUMMARY OF KEY PARTNERS

Success requires collaboration between public and private sectors (1/2)
• Local government does not play a role in technology deployments in

Local public transportation; however it does have its own bus fleet, which is quite
small and usually operates free of cost
Government • Transport and Telecommunications Ministry: Mandates technology
deployments in public transportation
• BYD, Yutong, King Long: Have closed e-bus transactions in Santiago

• Sunwin and Alstom: Have tested electric buses, but these are not yet
Suppliers approved
• Foton: Provided e-buses outside of Santiago
• Zhongtong: Has approved e-buses for the Chilean market, but is not
operational yet
• Metbus: Currently leading the shift towards electromobility in partnership

with BYD and Enel X; operates 59 routes in Santiago
Operators • Buses Vule and STP Santiago: Operating Yutong buses
• Redbus Urbano: Piloted the Alstom bus in its C20 route, starting in May
2019; is operating 25 buses owned by NEoT
• Subus: Piloted one articulated bus
29

• Only participation thus far is through the subsidy for public transportation
• Banco Estado: Public bank focused on SMEs; has not yet been involved
Financiers – directly but could potentially play a role
Public • CORFO: Government agency that supports entrepreneurship, innovation,
and competitiveness; could also potentially play a role, although not
involved to date
• NEoT: Investment platform specializing in renewable energy and

electromobility, has invested in 25 electric buses
Financiers - • Approximately 50 companies have bought tender rights; this includes both
Private traditional financial actors and new actors (e.g., Hyundai, Volvo, Societe
Generale, Sumitomo Corporation, Mitsui & Co, BKM Holding)
• Enel X: Italian energy company active in Santiago, is currently leading

Santiago’s electromobility transition with investments in 285 e-buses
Utility • Engie: French energy company active in Santiago that has invested in 100
Companies e-buses
• Sociedad Austral de Electricidad: Chilean electricity company that is also
involved in the sector
30
SUMMARY
THE OPPORTUNITY

Santiago
Bogota
Mexico City
Sao Paulo
Medellin
INVESTMENT PIPELINE
CITY INVESTMENT SYNOPSES >> BOGOTA

Amount1 • 100-bus project (12m bus) – USD 30 million total investment
Commercial model Separation of all assets, through new contracts

seniority (50%)
Time horizon 10-15 years; shorter with exit 5-10 years; shorter with exit • 5-10 years, depending on
or re-financing or re-financing loan duration
Expected returns 12% target IRR 8% APR, depending on loan 1% annual fee, depending on
Upcoming projects • SITP zonal lines Phases 3, 4, 5 – 2,024 buses (Q2 2020)
• SITP zonal renovation of Phase III buses reaching useful lifetime – 5,172 buses (2020-2031)
• SITP trunk lines fleet increase – 150 (2023-2024)
• SITP trunk lines renovation of Phase III buses reaching useful lifetime – 682 buses (2024-
2028)
32
MARKET OVERVIEW
Bogota has consolidated most public transport operators within the SITP
Market share of business models1

2,007 5,977 4,500
BRT ZONAL (SITP) TEMPORARY SITP
The following slides focus on opportunities for the BRT and zonal systems
Notes: 1. Transmilenio presentation, May 2020. This excludes 163 cable car units within SITP.
33
MARKET POTENTIAL
SITP has USD 150M potential for e-buses in 2020

USD millions, 2020-2030 Overview of Transmilenio/SITP - 2019
160 $152
Trunk lines General • SITP is overarching transit system,
140 which includes BRT and non-BRT
$117 Zonal lines
120 $106 $112
$101
100 $90 # of buses1 • 7,984 buses total
80 • 2,007 buses in the BRT
$62 $65
60
$59 • 5,977 buses in zonal SITP
$41 $44
40
# of • 2.4M per day in the BRT
20
passengers • 1.5M per day in zonal SITP
0
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Concession • Concessions last 10-25 years
agreements • Two concession modalities:
KEY DRIVERS:
– Fleet supplier and operator
• Fleet renovation: ~1,000 buses per year, following tender
submit coupled proposal
with 2,040 buses in 2020
– Fleet supplier submits non-
• % of buses procured that are electric: At least 30%
coupled proposal; Transmilenio
procured in 2020, followed by steady increases in line
designates the operator
with Ley 1964 targets
• Bus cost: USD 250,000, on average
Notes: 1. Transmilenio presentation, May 2020. This excludes 163 cable car units within SITP.
34
MARKET READINESS
The recently-elected city government strongly supports electromobility

Policy – • Bogota’s city government in office since January 1, 2020 has
e-bus expressed strong commitment and support for
commitment electromobility • Ley 1964 has elevated
• A national law passed in 2019 (Ley 1964) promotes vehicle conversations on
electrification (e.g., through mandates and tax breaks) and sets electric buses and has
annual targets, from 10% by 2025 to reach 100% by 2035 brought new attention
to the issue
• 2020 tenders favor 100% electric buses, with contracts that
last for 15 years (rather than 10 years) and lower requirements • There is an opportunity
for autonomy (260km instead of 300km) to advance e-bus
adoption by getting
more leaders on board
Policy – • Responsibilities are clearly stipulated: the city develops routes with electromobility, as
transport and owns stops and terminals seen by the progress
system • Fleet providers own and help maintain assets for operator made in Bogota after
organization use; both have contracts with the city the new mayor
supported e-buses
Notes: 1. Transmilenio presentation, May 2020. Warranties for e-buses must last 5 years or 400K km, compared to 3 years and
200K km for CNG or diesel.
35
MARKET READINESS
Bogota has contracts for 483 e-buses and >30% of 2020 tender will be electric

Technology • Bogota will have a total of 483 electric buses in 2020-2021
– supply • BYD is currently the market leader, with contracts for 379 buses,
which will be operational in September 20201 • Concession contracts mitigate
• Yutong manufactured the first electric bus to arrive in the city
technology risk via five-year or
400,000km factory guarantees and
• Mitsui – Caetano, Siemens, Sunwin, Yinlong, Dongfeng, Sinotruck,
guaranteed battery autonomy for
Foton, and Zhongtong also participated in the bid
15 years
• In first round of e-bus tenders (483 e-buses), charging infrastructure
was set to be provided by the city's distributor (Enel-Codensa). For • BYD has considerably scaled post-
new tenders, charging infrastructure is open for new providers. sale support as a part of 2019
contracts, including preventive
maintenance for ~2 years,
Technology • Celsia is purchasing 126 e-buses from BYD to join the SITP fleet, guaranteed spare parts for 15 years,
– demand corresponding to USD $33 million
trainings for technicians and
• Ashmore (Estructura Plural Electribus Bogotá) has purchased 253 drivers, and workshop support
buses from BYD for TransMilenio UF2 and UF5, totaling USD $80
infrastructure
million
BYD closed deals for an additional 104 buses in UF Suba and
• Tendering charging infrastructure
•
Perdomo, totaling 483 provision—which was set in the first
round of e-bus tenders—can reduce
• In 2020, the city is tendering another 2,085 buses (with 80, 50 and
40 passenger capacity); projects with zero emissions and extended leasing costs paid by Transmilenio;
guarantees will be prioritized; it is expected that at least 30% of this is the model going forward
tendered buses will be electric
Notes: 1. BYD, “BYD to Help Colombia Create the Largest Electric Bus Fleet in the Americas”, Nov. 2019.
36
MARKET READINESS
Private investors and energy companies are leading e-bus financing

Financing – • Financiera de Desarrollo Nacional is working with the government to
public develop a financing scheme for transactions over USD $30 million
• Bancoldex is working to develop a line of credit to support
• It is critical that
electromobility
contracts address
termination risk and
Financing – • Two third parties, Ashmore and Celsia, have won tenders to procure interface risk for asset
private electric buses owners1
• Others are interested in joining as asset providers • Bringing in third-party
• Commercial banks are reluctant to increase their exposure to the asset owners (like
transport sector Ashmore, Celsia) has
been a new way to
finance e-buses given
Financing – • Bogota has a trust fund where fare collections are sent; the city the hesitance of
guarantees provides additional resources when needed commercial banks
• The system trust fund guarantees payment to investors
Notes: 1. For termination risk, contracts currently specify three options: i) government continues to pay asset owner, ii)
government deploys assets to another operator, or iii) government buys asset. For interface risk, the government increased
fleet reserve requirements and agreed to pay asset owners 80% of the monthly payment for 10 years after buses are
delivered; the remaining 20% of the payment depends on bus availability. 37
E-BUS MODEL
SITP has already put in place a model to scale up electric buses
Fleet
Guaranteed provision Equity or debt
cash flows payments investment
System Special Purpose Private
Government
trust fund Vehicle / asset owner investors
Central fare
collection via Fleet
Tarjeta TuLlave provision Development
contract E-bus finance
Managing
entity assets institutions
Fleet providers can submit a

Operators “coupled” proposal with a fleet
Operation operator or a non-coupled proposal
Passengers payments

Financing
38

• Mayor’s Office: Defines bidding parameters to ensure e-buses are

financially and fiscally viable for all stakeholders (i.e., operators and
Local government)
Government • Transmilenio: Bus rapid transit system in Bogotá that awarded e-bus
contracts to BYD
• SITP: City-wide transportation system under which e-buses will operate
• BYD: Bogotá’s current and main supplier – it will provide 379 e-buses,
which will begin operating in September 2020
Suppliers • Yutong: Supplied the first electric bus in December 2019
• Sunwin and Foton: Participated in the bidding process and are currently
exploring the market, but have not made any transactions yet
• Sistemas Operativos Móviles and Empresa Operadora de Transportes

Gran Américas S.A.S: Will operate the day-to-day operations of e-buses,
Operators starting in the towns of Usme and Fontibon
39

• Bancóldex: National development bank that created a line of credit for SITP
operators/concessionaries to promote electromobility adoption
Financiers – • Financiera de Desarrollo Nacional: National development bank that is working
to develop a financing scheme for electric bus projects larger than USD 30
Public million
• Fondo Nacional de Garantías: Public institution that provides guarantees to
increase credit to SMEs; could potentially guarantee e-bus projects in the future
Financiers - • Ashmore: Investment manager that invested USD 80 million in 259 e-buses
in Bogotá
Private
Utility
• CELSIA: Electric energy company that has invested in 120 e-buses
Companies
40
SUMMARY
THE OPPORTUNITY

Santiago
Bogota
Mexico City
Sao Paulo
Medellin
INVESTMENT PIPELINE
CITY INVESTMENT SYNOPSES >> MEXICO CITY
Amount1 • 20-bus project (18m articulated) – USD 16 million total investment

• 50-bus project (18m articulated) – USD 40 million total investment
• 100-bus project (18m articulated) – USD 80 million total investment
Commercial model Separation of all assets, through existing contracts

seniority (50%)
Expected returns IRR should target IRR, 8% APR, depending on loan 1% annual fee, depending on
depending on fleet provision agreement guarantee structure
payment amount (not yet set
by Metrobus)
Upcoming projects • Metrobus Line 3 (2020-2021)

• Annual fleet renovation
42
MARKET OVERVIEW
Mexico City has four bus models, with varying levels of formalization and govt oversight

~1600 ~18,000 ~2,000
~700
BRT LARGE PRIVATE SMALL PRIVATE GOVT-RUN

METROBUS CORREDORES INDIV. CONCESSIONS STE - RTP
COPATTSA
The following slides focus on Metrobus, the BRT system,

which offers near-term opportunities to transition to e-buses
Notes: 1. Colors correspond to the five high-level bus operator business models that exist in Latin
American cities today. For more information, see slide 74.
43
MARKET POTENTIAL
Metrobús has >$50M annual potential for e-buses by 2030

USD millions, 2020-2030 Overview of Metrobús in Mexico City - 2019
60 $55 $55 $55 $55 $55 $55
General • Metrobus is the BRT system in
50 $46 Mexico City
40 $36
# of buses • ~700 buses in the BRT system
30 $27 across 10+ private operators
• Buses are mostly articulated,
20 $17 biarticulated, and two-story
$8
• Recent efforts have renewed fleets
10
to cleaner technologies1
0
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
# of passengers • ~1 million per day

KEY DRIVERS:
• Fleet renovation: ~70 buses per year
• % of buses procured that are electric: Gradual Concession • Most concessions last 10 years;
increase to 100% electric by 2025, given city agreements concessions in Línea 7 are 20
commitment years
• Bus cost: USD ~800K for 18am articulated bus
Notes: 1. Diesel Euro V and diesel particulate filter. 2. Annual market potential based on # of buses renovated
per year (70, on average), % of buses procured that are electric (10 buses in 2020, growing to 100% of buses in
2025 per government commitment to C40 Green and Healthy Streets Declaration), and cost of e-bus (USD
790k, per latest estimate from Metrobus). 44
MARKET READINESS
The government has committed to e-buses and started to explore opportunities

Policy – • City government has committed to only procure zero-emission buses
e-bus after 2025, via the C40 Green and Healthy Streets Declaration
commitment • City is developing a 2020-2026 Climate Change Program—Programa • For the extension of Linea
para la Reducción de Emisiones del Transporte—which includes a 5, Metrobus has put in
chapter on electromobility, required by law place a pilot with two
concessions that separate
Policy – • Metrobus creates clear central plans for routes, operations, and asset ownership from
transport expansion, which are accessible to all system stakeholders asset operation and
system maintenance
• Responsibilities are clearly defined: operators supply buses, while
organization
Metrobus oversees stations, roads, and parking lots • Depending on results, this
model could be further
• A central trust (fideicomiso) guarantees payments to operators
(based on kms. in service), fleet renewal credits, and other payments— scaled throughout
based on central fare collection system; for e-buses, Metrobus is Metrobus—creating an
exploring using its trust to lease e-bus assets for operator use opportunity for e-buses
• Concession agreements have comprehensive terms that clearly define • The Metrobús fideicomiso
the relationship between Metrobus and operators regulation was updated to
allow for leasing of e-bus
• Metrobus monitors that operating routes are met, bus maintenance is
assets from a third party,
up to date, and operators are on schedule
for operator use
45
MARKET READINESS
Metrobus is preparing to test several e-buses in 2020

Technology – • Metrobus has conducted technical assessment of Linea 3 to
supply develop/revise technology specifications for articulated buses; also
aims to develop technology specifications for 12m buses in Linea 4 • Secure performance
• Several Chinese manufacturers, Daimler, and Volvo are exploring the guarantees from
market; BYD and Yutong have local representatives manufacturers to ensure
• Although outside Metrobus, Yutong has provided 63 fully-electric that operators have a
trolley-buses to the Sistema de Transporte Electrico (STE), now minimum number of
operational in the Eje Central and select other routes buses available that meet
• Comisión Federal de Electricidad (CFE) is public utility; Engie is also key performance metrics
active in the market (e.g., # of km per charge
of battery)
• Identify lines and
Technology – • MIVSA/ADO, Engie, and Yutong have signed MOU and plan to operators where close to
demand procure and pilot one 18m e-bus from Yutong, to arrive later in 2020 1:1 replacement is
• Metrobús aims to place 10 articulated e-buses in Linea 3 by mid- possible, based on routes
2020 and is exploring opportunity to place 8 or 10m e-buses in and charging needs, and
feeder lines focus initial procurement
• Several other operators within Metrobus have expressed interest in on these lines
e-buses and are exploring the opportunity, in partnership with ZEBRA • Prioritize fast-charging
• STE aims to scale to ~500 new trolleybuses systems, where possible
46
MARKET READINESS
Financiers have expressed interest but are waiting for concrete opportunities

Financing – • Banobras and NAFIN are interested in electric mobility but have
public not yet established concrete financing schemes for e-buses
• Separation of asset
ownership from operations
in future concessions is
Financing – • Several third parties, including private transport and energy seen as potential
private companies, have expressed interest in asset ownership opportunity to finance the
transition to e-buses
• Having a sub-sovereign
guarantee is ideal;
Financing – • The city takes on demand risk by paying operators per kilometer,
guarantees as stipulated in concession agreements however, many city and
• Credit payments are executed via the Metrobus fideicomiso, state/regional
providing a guarantee to investors governments have been
hesitant to provide them—
either due to lack of
resources or political
dynamics across parties
47
E-BUS MODEL
The Metrobus fideicomisco could secure leasing contracts with third party asset owners
Equity or debt
Subsidies investment Investors,
Municipal Metrobus Special Purpose
energy
govt account1 Vehicle / asset owner
companies
Fleet
Guaranteed provision
cash flows payments
Fleet Development
Metrobus E-bus provision finance
fideicomiso2 assets contract with institutions
Central fare
collection Metrobus
Operation
payments Operators3
E.g., MIVSA, CISA
Passengers

Financing
Notes: 1. Receives and manages subsidies from the government and helps make operation payments to operators (by km). 2.
Stabilizes demand, by guaranteeing a minimum level of revenues to operators and to SPV. 3. Operators could own the chassis
(supported by concessional finance), if investor did not want to own this asset.
48

• Secretaría de Movilidad (SEMOVI): Sets policy and regulates public

transport system in Mexico City
• Secretaría del Medio Ambiente (SEDEMA): Sets policy and oversees
Local environmental issues in Mexico City; is developing a 2020-2026 Climate
Change Program for the city, required by law
Government • Metrobus: Oversees and regulates BRT system in Mexico City; is exploring
how to place e-buses in Linea 3, Linea 4, and several feeder lines
• Sistema de Transporte Eléctrico (STE): Oversees and regulates electric
transport in Mexico City; this includes ~200 trolley buses
• Yutong: Largest manufacturer of e-buses globally; has representatives in

Mexico City; to date, is the main trolley bus supplier for the city
Suppliers • BYD: Second largest manufacturer of e-buses globally; has representatives
in Mexico City
• MIVSA/ADO
• CISA: Association of operators created in 2005; has 1,300 buses in three
Operators lines of Metrobus (1, 4, 7) and outside of Metrobus in corridors
• RTP
49

• Banobras: National development bank that has a fund, PROTRAM, focused

on infrastructure projects for BRT systems, which has invested over USD 1.2
Financiers – •
billion to date
NAFIN: National development bank that provides guarantees and loans to
Public support private operator fleet renewal in corridors; for example, in 2017
NAFIN issued a credit line for USD ~25 million for fleet renewal at the
federal level
• Ascendal: Transport company interested in acting as fleet provider in

Mexico City; has signed Investor Declaration with ZEBRA
• Banca Mifel: Commerical bank that has supported bus financing projects
alongside Banobras PROTRAM; for example, in Queretaro they established
Financiers - a line of credit to purchase 222 new BRT buses, backed by the trust of the
BRT
Private • Banco Multiva: Commercial bank that has supported bus financing projects
alongside Banobras PROTRAM
• CitiBanamex: Commercial bank that has supported bus financing projects
alongside Banobras PROTRAM
Utility • Comisión Federal de Electricidad (CFE)

• Engie: Private energy company interested in acting as fleet provider in
Companies Mexico City
50
SUMMARY
THE OPPORTUNITY

Santiago
Bogota
Mexico City
Sao Paulo
Medellin
INVESTMENT PIPELINE
CITY INVESTMENT SYNOPSES >> SAO PAULO
Amount1 • 100-bus project (12m bus) – USD 10 million2
Commercial model Separation of electric assets, via existing contracts

seniority (50%)
Time horizon 10 years; shorter with exit or 5-10 years; shorter with exit • 5-10 years, depending on
re-financing or re-financing loan duration
Expected returns 9% target IRR (TBC) 8% APR, depending on loan 1% annual fee, depending on
Upcoming projects • Distribution subsystem operator (2020-2021)
Notes: 1. Project size could vary. 2. Only includes electric

components, ~1/3 of bus price.
52
MARKET OVERVIEW
24 private operators participate in SPTrans, across three sub-systems

~4,350 ~3,600 ~6,100
~370
STRUCTURAL REGIONAL DISTRIBUTION
SUBSYSTEM ~5,930
ARTICULATION SUBSYSTEM
SUBSYSTEM
Larger buses run by Basic buses run by Smaller buses run by
traditional operators traditional operators newer operators
The following slides focus on high-potential operators across the three sub-systems
Notes: 1. The structural subsystem connects terminals, using corridors and serving the central region. The regional articulation
subsystem connects smaller and busier neighborhoods within the same region. It also connects different regions, if neighborhoods
share borders and do not cross the central region. The distribution subsystem connects remote neighborhoods to local bus corridors
and terminals (CPTM trains and metro stations), not crossing the central region.
53
MARKET POTENTIAL
SPTrans will reach $1B annual potential for e-buses by 2030
Market potential for electric buses

USD millions, 2020-2030 Overview of SPTrans - 2019
1,200 # of buses • ~14,000 buses across 24 private
$1,055
1,000 operators
• 70% of buses are Euro V
800
• 26% of buses are 12m1
600
400 $296
$250 $277 $236
200 $156 $130 $138 # of • 6.5M per day, on average
$73 passengers • 2.6B passengers in 2019
$0 $20
0 • Covid-19 is affecting ridership
Micro Padron Bi/articulated
Concession • Concessions are regulated by

KEY DRIVERS: agreements SPTrans and last 15 years
• Fleet renovation: Varies by year, depending on how • The most recent contracts were
many buses entered the system each year, 2009-19 signed in Sep 20192
• % of buses procured that are electric: Working • Private concessionaires own and
toward 100% by 2028, in line with Climate Change Law operate fleet
• Bus cost: USD 150K for micro (<12m), USD 270K for
padron (~12m), USD 515K for articulated
Notes: 1. 19.1% are Mini (~35 pax), 18.4% are Midi (~55 pax), 17.4% are Basic (~75 pax), 10.2% are Articulated 23m (~171 pax), 6.2%
are Articulated 18m (~120 pax), 1.4% are trolley buses (padron sizes. 12-15m, ~96-101 pax), 0.9% are Padron 15m (~99 pax), and
0.7% are Biarticulated (~198 pax). 2. No buses were renovated at this time; renovation plans are presented six months after
contract renewal.
54
MARKET READINESS
Based on Climate Law, public transport must be zero emission by 2038

Policy – • In January 2018, São Paulo set pollution reduction targets for all
e-bus buses, including 100% reduction in CO2 within 20 years and 95%
commitment for particulate matter and nitrous oxide,1 based on amendments to • Implementation follow-up is
the 2009 Climate Change Law critical to make sure target
• Contracts signed with bus operators set annual emission emissions reductions are
reduction targets, which provide another tool to reinforce emission achieved; the previous Climate
reduction targets within public transport Law did not meet its goals, in
part due to lack of penalty for
not meeting targets
• Contracts stipulate penalties if
Policy – • The Secretary of Mobility and Transportation (SMT) is responsible operators do not comply with
transport for regulating and making concessions in the system emission reduction targets and
system • SPTrans is the public transport authority and is responsible for can be suspended if not
organization supervising contracts, planning routes, managing payment followed within a six-month
systems, monitoring quality, and applying fines window
• Operators are chosen through a bidding process—they own, • Maintenance and diesel costs
operate and maintain their fleets need to be revised for new
• The last bidding process was finalized in March 2019 and the procurements, as costs
stipulated for 16 e-buses pilot
winning operators signed 15-year contracts in September 2019
were higher than diesel
Notes: 1. Specific targets are: CO2 to be reduced 50% in 10 years and 100% in 20 years, particulate matter to be
reduced 90% in 10 years and 95% in 20 years, and nitrous oxide to be reduced 80% in 10 years and 95% in 20 years.
55
MARKET READINESS
São Paulo has local e-bus production, due to high cost of importation
Technology – BYD has a factory in Campinas (São Paulo State) that

•
supply produces chassis and battery for 720 vehicles/year and
will produce articulated buses in 2020; BYD is also • Local manufacturing is critical
installing a battery assembly plant in Manaus given high cost of importing, due
to national policies
• Eletra has a factory in São Bernardo do Campo (São
• Local supply of articulated buses
Paulo) and produces e-buses and trolleybuses and micro buses is needed; BYD
• Higer has representation and offers ultracapacitor and plans to launch both models
opportunity charging buses, but none have been procured • Competition is needed to offer the
yet best products to operators (e.g.,
lower maintenance costs, reliable)
• Body builders Caio and Marcopolo are interested in • Drop-in biodiesel technologies
supplying e-buses; Caio is liaising with CaetanoBus for the (HVO) are supported by the
drivetrain supply national government, the biodiesel
sector and diesel bus
manufacturers and operators;
however, supply is not readily
available and could be more
Technology – • Transwolff, a bus operator in São Paulo, procured 16 expensive than e-buses
demand electric buses from BYD in 2019, as well as charging • SPTrans and operators prefer to
infrastructure and a credit agreement for electricity with purchase chassis but lease
Enel X batteries and charging
infrastructure
• Eletra has provided ~200 trolleybuses to the city of São
Paulo; the last purchase was made in 2013
56
MARKET READINESS
National DFIs have attractive financing schemes, with strict national content rules

Financing – • BNDES has an attractive finance scheme for e-buses, FINEM Meio
public Ambiente, with credits that cover 80-100% of bus cost, last the entire
lifetime of the asset (up to 34 years), and have a 9-11% interest rate • Attractive public
• BNDES has strict rules for national content, which stipulate that a financing options exist,
certain percentage of the product must be produced inside Brazil1 contingent on national
• CAIXA and other regional development banks, such as Banco do content regulations
Nordeste, also offer favorable conditions for e-buses
• Public and private
financiers are still reluctant
Financing – • Enel X has expressed interest in asset ownership to accept existing
private • Engie, Siemens Financial Services, and other private investors are also
guarantees given they do
participating in discussions
• Commercial banks have long-standing relationships with operators
not cover all risks (e.g.,
(i.e., Luso, Guanabara, Caruana Financeira) and provide credit and fares are politically set)
contract loans, but do not offer specific conditions for e-buses • Financing options are
needed for operators and
Financing – • The farebox trust fund, managed by SPTrans, can be used as a third parties—given
guarantees guarantee for private operators to cover up to 30% of their monthly operators prefer to
payment purchase chassis but lease
• SPTrans consent on the concession contract terms (i.e., 15 years, with batteries and charging
established payments and ROI) has also been used as a guarantee infrastructure
Notes: 1. BNDES has recently decreased the national content minimum requirement for e-buses to 20% until the end of 2021,
30% from 2022 to 2026, and 50% from 2026 on.
57
E-BUS MODEL
Bringing in new asset owners helps separate and mitigate risks
Asset owners –
City Subsidies utilities, manufacturers Loans or
Guarantee of lines of
administration up to 30% of
credit
operators’
monthly
payment
Central fare E-bus batteries Leasing Development
Farebox
collection, and charging contract finance
Trust
Bilhete Único institutions
Commercial
Credit for chassis
Operators purchase lenders or
manufacturers
Passengers

Financing
58

• SPTrans: Municipal local government authority that manages public

transportation and is responsible for supervising contracts, planning routes,
managing payments, monitoring quality, and applying fines
• Secretary of Mobility and Transportation (SMT): Municipal authority
responsible for regulating and making concessions
Local • SMT: i) formulates, proposes, manages, and evaluates public policies for
the development of urban mobility; and ii) studies, plans, manages,
Government integrates, inspects and controls the individual and collective transport of
the city
• COMFROTA (Steering Committee of the Fleet Replacement with Cleaner
Alternatives Monitoring Program): Program that supports the
implementation of recommendations and guidelines established by Climate
Laws n˚ 14,933/2009 and n˚ 16,802/2018
• BYD: Leader in the market, manufactured the 16 electric buses that are
currently operating in the city; BYD has a factory in Campinas
Suppliers • Eletra: Manufactures the trolleybuses that operate in the city of São Paulo
(engine: WEG); Eletra has a factory in São Bernardo do Campo
59

• BNDES Finame: Provides financing for chassis and batteries (financing 80%
Financiers – of the amount in 10 years)
Public • Caixa: Offers better conditions for e-buses; other regional national
development banks such as Banco do Nordeste do so as well
• Siemens: Participating in discussions to provide financing, but there have

been no concrete actions to date
Financiers -
• Commercial banks: Have long-standing relationships with operators and
Private provide credit and contract loans, but do not offer specific conditions for e-
buses
• Transwolff: Currently leading the shift towards electromobility; it operates

16 electric buses on one route
Operators • Ambiental Transportes Urbanos: Operates the trolleybus system (~200
vehicles)
• Santa Brígida: Tested e-buses in tests deployed in the city prior to 2019
Utility • Enel X: Italian energy company that has expressed interest in financing e-
buses through leasing deals, buses, batteries, infrastructure, and supporting
Companies operators with deployment
60
SUMMARY
THE OPPORTUNITY

Santiago
Bogota
Mexico City
Sao Paulo
Medellin
INVESTMENT PIPELINE
CITY INVESTMENT SYNOPSES >> MEDELLIN
Amount1 • 40-bus project (8m bus) – USD 6 million

• 80-bus project (8m bus) – USD 12 million
• 100-bus project (8m bus) – USD 15 million
Commercial model Separation of assets, via permits that local public transport authorities guarantee for 15 years

seniority (50%)
Expected returns IRR should target 9-18%, 8% APR, depending on loan 1% annual fee, depending on
depending on fleet provision agreement guarantee structure
payment amount (not yet
set)
Upcoming projects • 2-3 TPC operators
62
MARKET OVERVIEW
Medellín has govt-run BRT and private operators that vary by scale and level of
formalization
# of buses, out of ~6,440 total
~5,930 ~370
~140
~60 PRIVATE OPERATORS SITVA GOVT-RUN

TRANSPORTE PÚBLICO COLECTIVO CONCESSIONAIRES METROPLUS
The following slides focus on Transporte Público Colectivo (TPC), given TPC represents >90%
of the market in the city
Notes: 1. Colors correspond to the five high-level bus operator business models that exist in Latin American cities today.
For more information, see slide 74.
63
MARKET POTENTIAL
TPC will reach ~$30M annual potential for e-buses by 2030

Overview of Transporte Público
$30 Colectivo (TPC) - 2019
30
$27
$24
25 General • TPC spans across the Valle de
$21
Aburrá, the metropolitan area
20 $18
• Medellin is one city within the
$16
15 metropolitan area
$13
$10
10 # buses • ~6,000 buses across ~60 private
$7
5 $4 operators1
$1 • Many buses are Euro IV, V
0 • Most buses are micro, ~8m
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
# passengers • 879,000 per day

KEY DRIVERS:
• Fleet renovation: ~450 buses per year
• % of buses procured that are electric: 2-3 Concession • Operators have permits with no
agreements end date
operators currently ready to transition, with
• Both the Medellin (Secretary of
growth each year to meet Ley 1964 targets
Mobility) and Valle de Aburrá
• Bus cost: USD 150K for 7.8m bus
(AMVA) local authorities oversee
the system
Notes: 1. There are 6,000 buses in the Valle de Aburrá, ~3,600 buses in the city of Medellin. 2. Annual market potential
based on # of buses renovated per year (400, on average), % of buses procured that are electric (based on Ley 1964
targets), and cost of e-bus (USD 150k).
64
MARKET READINESS
The government publicly supports e-buses and is working to consolidate the TPC system

Policy – • City government has committed to electrifying 100% of the city’s bus
e-bus fleet by 2030, with the goal of becoming the “capital of
commitment electromobility” in Latin America • Continue to support the
organization and consolidation
• City government has committed to only procure zero-emission buses of traditional TPC operators into
after 2025, via C40 Green and Healthy Streets Declaration consortiums, which creates
• A national law passed in 2019 (Ley 1964) promotes vehicle opportunity to transition to e-
electrification (e.g., through tax breaks) and sets annual targets, from buses
10% by 2025 to reach 100% by 2035 • Create juridic stability of
contracts for operators that
transition to buy e-buses, to
Policy – • The Secretary of Mobility in Medellin (SMM) and AMVA carry out ensure services and revenues
transport central planning—including recent efforts to consolidate and continue for the lifespan of
system integrate the TPC system—to guide operator activities vehicles
organization • Responsibilities are clearly stipulated: operators own, operate, and • Create centralized fare
maintain buses; the city handles road infrastructure and permits1 collection system to separate
• There is not currently a city-level trust to back operations; central fare collection and payment to
fare collection exists (Tarjeta Civica), but most TPC operators are not operators, without impacting the
yet integrated and therefore collect fare revenues in cash tariff
• Launch early planning efforts to
find space for patios and
chargers
Notes: 1. For the BRT and SITVA, SITVA handles central fare collection.
65
MARKET READINESS
E-buses have been tested in the city and several suppliers have executed transactions

Technology – • Zhongtong has established a warehouse in Medellin with spare parts
supply and a technical team; they have standardized their 7.8m e-bus model for
Medellin and have sold 12 of these buses to Masivo de Occidente
• Secure warranty and
(MDO)
maintenance agreement with
• BYD has established a store in Medellin with post-sale support; their manufacturers, especially for
smallest e-bus model is 9.3m, but are considering 8m bus batteries
• Electricity can be purchased in non-regulated market with minimum of • Ensure maintenance happens
0.1MW demand through OEM-approved
• Foton also has representation in Medellin programs
• Use purchasing terms to ensure
strong post-sale support (e.g.,
Technology – • Metroplús, the Bus Rapid Transit (BRT) public body, purchased 64 12m e- Metroplús purchase was
demand buses from BYD, following a successful pilot since 2017; all 64 buses are contingent on BYD opening a
operating in groups of ~17-22; Metroplús is developing charging stations store in Medellin)
and infrastructure • Structure performance-based
• MDO, a private operator and concessionaire of SITVA feeder lines, contracts, where manufacturers
purchased four 7.8m e-buses to begin operations in 2020; they have compensate operators if buses
ordered eight more to arrive in June 2020 are not available for operations
• Several TPC operators have expressed interest in e-buses and are • Engage formal, creditworthy
exploring the opportunity, in partnership with ZEBRA operators to structure viable
deals within TPC
66
MARKET READINESS
Government is leading efforts to develop financing schemes for electric mobility

Financing – • AMVA, EPM, Findeter, and others are structuring a line of credit to provide
public financing to operators for electric vehicle renovation, including some e-
buses; the credits can cover up to 70% of the vehicle price, last up to 10 • Many investors have
years, and have interest rates ranging from ~8-12%1 minimum investment
• Bancoldex is working to develop a line of credit to support electromobility size above USD 30
million—which
Financing – • Masivo de Occidente accessed financing from Leasing Bancolombia— highlights the
private supported by line of credit from Findeter—to purchase 12 e-buses importance of
• Bancolombia has Linea Sostenible de Bancolombia, a line of credit for structuring larger
sustainable transactions with an interest rate that is one percentage point projects rather than
lower than the standard rate; the scope includes e-buses pilots only
• Several third parties, including manufacturers and asset management funds,
have expressed interest in asset ownership • Centralized payment
system with
guaranteed cash flows
Financing – • City does not currently guarantee TPC operator revenues, but central fare is critical to investors
guarantees collection could help guarantee payment to investors
• Credit guarantees could be provided by Fondo Nacional de Garantías
(FNG) or development banks
• FNG guarantees credits for small and medium-size businesses (SME), based
on their level of revenue, and charges an annual commission based on the
remaining balance of the debt
Notes: 1. This financing scheme focuses on vehicle electrification more broadly and e-buses are not the primary
target. The financing scheme has not yet been used for e-bus renovation, but this is one part of the plan. 2. The
maximum value to be guaranteed for a preferred medium-sized company is 7.130M COP, covering up to 50% of the
loan. The cost of the guarantee is 6.58% each year. 67

• Secretaría de Movilidad de Medellín: Sets policy and regulates public

transport system in Medellin
Local • Secretaría de Medio Ambiente de Medellín: Sets policy and oversees
environmental issues in Medellin
Government • Área Metropolitana del Valle de Aburrá (AMVA): As the transport
authority, sets policy and regulates public transport system in Valle de
Aburrá, including Medellin
• Zhongtong: Chinese manufacturer of e-buses; provided four 7.8m e-buses

to Masivo de Occidente in 2019 and will provide eight more e-buses in
2020; has a warehouse with spare parts in Medellin
• BYD: Second largest manufacturer of e-buses globally; provided 64 e-
Suppliers buses to Metroplús (BRT system) and has set up physical presence/store in
Medellin
• Foton: Has representation in Medellin and is exploring the market
• Other: Sunwin, Yutong exploring other markets in Colombia
• Flota Nueva Villa: Association of operators created in 1971; has 72 buses in

4 routes arranged directly with the municipality; is currently renovating 4
buses per year with their own resources
Operators • Sotrames: Association of operators created in 1964; has 402 buses in 27
routes arranged directly with the municipality and with Cuenca 5
• Santra: Association of operators with 320 buses (380 upper limit) in 17
routes arranged with the directly with the municipality and Cuenca 5
68

• Findeter: National development bank working with AMVA and EPM to

develop a financing scheme to renovate electric vehicles
• Bancoldex: National development bank structuring a line of credit for e-
mobility
Financiers – • Financiera de Desarrollo Nacional (FDN): National development bank
working to develop financing scheme for electric bus projects larger than
Public USD 30 million
• Fondo Nacional de Garantías (FNG): Public institution that provides
guarantees to increase access to credit for SMEs; could potentially
guarantee e-bus projects in the future
• Ashmore: Exploring the market; has invested in 253 buses in Bogota

Financiers - • Bancolombia: Bancolombia Leasing financed 12 e-buses purchased by
Masivo de Occidente
Private • MGM Innova Group: Exploring the market for e-buses in Medellín
• Empresas Públicas de Medellín (EPM): Public utility company serving

Utility Medellin and other areas of Colombia; working with AMVA and Findeter to
develop a financing scheme to renovate electric vehicles
Companies • Celsia: Colombian energy company investing in e-buses in Bogota, but not
yet active in Medellin
69
E-BUS MODEL
Bringing in new asset owners could help separate and mitigate risks
Leasing Equity or debt

payments investment
Fiduciary Special Purpose Private
Passengers1 Vehicle / asset owner investors
trust
Over time TPC operators

should be integrated into
Performance- Development
central fare collection E-bus
Operation based leasing finance
payments assets contract institutions
Line of Credit
credit guarantee
Operators using e-buses
should be given permit Loan to
Public to operate for 15 years Operators purchase certain Commercial
transport E.g., Flota Nueva Villa, parts of e-buses lenders
authority1 Sotrames (e.g., chassis)

Financing
Notes: 1. Ideally, PTA would also guarantee cash flows to the fiduciary trust,
but this is not the case today.
70
SUMMARY
THE OPPORTUNITY

Santiago
Bogota
Mexico City
Sao Paulo
Medellin
INVESTMENT PIPELINE
INVESTMENT PIPELINE
Summary of transactions (not exhaustive)

Summary of completed transactions
2015-present
Project City Amount # of buses Investors Model Status
Transantiago, Corredor Santiago USD ~30M 102 (12m) Enel X Separation of assets, new Complete
Grecia (part I) contract, with utility
Transantiago, Vule y STP Santiago Unknown 100 (12m) Engie Separation of assets, new Complete
contract, with utility
Transantiago, Corredor Santiago Unknown 183 (12m) Enel X Separation of assets, new Complete
Grecia (part II) contract, with utility
Metroplús Medellin Unknown 64 (12m) City government Upfront purchase Complete
Sistema de Transporte Mexico City Unknown 63 (trolley City government Upfront purchase Complete
Eléctrico buses)
Sistema de Transporte Cali Unknown 26 (8m) Celsia, Transfondo Separation of assets, Complete
Masivo existing contract, with utility
SITP, UF4 & UF5 Bogota USD ~80M 259 (12m, <12m) Estructura Plural Electribus Separation of assets, new Complete
Bogotá (Ashmore) contract, with investor
SITP, UF2 Bogota USD ~30M 120 (12m, <12m) Empresa de Energía del Separation of assets, new Complete
Pacífico S.A. E.S.P (Celsia) contract, with utility
SITP, UF3 Perdomo Bogota Unknown 13 Este Es Mi Bus S.A.S. Provision and operation, Complete
new contract
SITP, UF1 Suba Bogota Unknown 91 ETIB S.A.S. Provision and operation, Complete
new contract
72
INVESTMENT PIPELINE

Summary of pipeline
2015-present
Project City Amount # of buses Investors Model Status
Transwollf Sao Paulo Unknown 16 (12m) Transwollf, BYD Separation of batteries, Complete
existing contract, with
manufacturer
Redbus, NEoT, ABB Santiago Unknown 25 (12m) NEoT, ABB Unknown Complete
(25)
Sistema de Transporte Montevideo Unknown 20 (12m) Unknown Unknown Complete

Metropolitano (STM)
Masivo de Occidente Medellin Unknown 12 (8m) Leasing Bancolombia Direct finance to operator In progress (4
procured)
RED Santiago Up to USD Up to TBD Separation of assets, new In progress

1.B ~4,300 contract
Sistema Integrado de Bogota Up to USD At least 631, TBD Separation of assets, new In progress
Transporte, Fase V, 670M up to 2,040 contract
Etapa III y IV
MiBus Panama Unknown 35 (8m) Unknown Unknown In progress

City
Sistema de Transporte Mexico City Unknown 50 (18m, STE Unknown In progress

Eléctrico articulated)
Sistema de Transporte Mexico City Unknown 80 (12m) STE Unknown In progress

Eléctrico
73
INVESTMENT PIPELINE

Summary of pipeline
2015-present
Project City Amount1 # of buses2 Investors Model Status
SPTRANS operator Sao Paulo TBC Up to 100 TBD TBD Early stage
New BRT system Salvador Up to USD 75 million Up to 206 TBD TBD Early stage
Sistema de Transporte Cali Up to USD 35 million Up to 106 TBD TBD Early stage
Masivo
Sistema de Transporte Mexico City Up to USD 140 million Up to 300 TBD TBD Early stage
Eléctrico
Ecovia Quito Up to USD 45 million Up to 70 TBD TBD Early stage
Transporte Público Colectivo Medellin TBD TBD TBD TBD Early stage
Notes: 1. These are early estimates based on number of buses and average cost of type of bus. 2. Not confirmed,
based on current discussions.
74
SUMMARY
THE OPPORTUNITY

Santiago
Bogota
Mexico City
Sao Paulo
Medellin
INVESTMENT PIPELINE
ZEBRA Vision & Goals
Shift all new bus procurements in leading Latin American cities to zero emission technologies
Knowledge
Cities Industry Financiers
Sharing
● Guarantee political ● Increase market ● Secure public ● Host annual showcase

commitment and competition and product commitments from event
develop fleet-wide availability leading financiers ● Facilitate knowledge
deployment strategies in ● Establish ZEBRA ● Establish financial transfer across cities
leading Latin American industry guidelines mechanisms for $1bi ● Deliver training on best
cities (Medellín, Mexico ● Engage utility sector to USD zero emission bus practices to utilities and
City, Santiago, São ensure grid capacity finance financiers
Paulo) ● Secure streamlined ● Disseminate real world
● Establish a procurement funds for advisory performance data
pipeline of over 3,600 e- services
buses in the region
76
BUS OPERATOR BUSINESS MODELS

We identified five types of bus operator business models across Latin American cities
Vertically-integrated, private operator in BRT

A
One private operator owns, operates, & maintains via concession
Divided responsibilities in BRT

B
One entity owns assets; another operates & maintains via concession
Large, more formal, private operator in traditional service

C
One private operator owns, operates, & maintains via permit
Small, informal, private operator in traditional service

D
Individual owns, operates, & maintains via permit
Government-run system
E
Public entity owns, operates, & maintains
77
How would concessional/blended finance work?

Financing Key differences:
• Lower interest rates
Commercial
financing
• Longer repayment periods

Commercial • Grace periods
investors • Strengthened guarantees
Concessional
Financial intermediary or Financing Asset

financing
Special Purpose Vehicle owner
Revenue guarantee
(demand stabilization)
mitigation
Credit guarantee Financing

Risk
Multilaterals, Guarantee
development financing
institutions Public transport
authority or other
guarantor
78
How would separation of asset ownership work?

Commercial
financing
Commercial investors Operators

Lease payment for e-
bus components
Concessional
Financing (bus, battery, charging)

financing
Financing
New asset owners (e.g., Revenue Guarantee
utilities, equity funds) guarantee
(demand
Credit guarantee stabilization)
mitigation
Multilaterals,
Risk
development financing
institutions
Public transport
authority or other
guarantor
79
ROLES OF KEY ACTORS IN E-BUS MODELS (1/2)

• Receives and manages resources from investors
SPV / • Purchases e-bus assets (batteries, charging stations, and/or chassis)
asset owner • Provides/leases e-bus assets to operators, via performance-based contracts
• Oversees fleet provision
• Collects revenues from passenger fares, either through centralized fare collection system
(Tarjeta Civica) or agreements with operators
Fiduciary trust • Provides revenues to SPV, to make fleet provision and operation payments
• Stabilizes demand, by guaranteeing a minimum level of revenues to the trust (e.g., per month)
Public transport
authority
• Access preferential financing from financial institutions to purchase certain e-bus assets (e.g.,
chassis)
Operators • Lease other e-bus assets from SPV, via performance-based contracts
• Operate and maintain e-bus assets in public transport system
80
ROLES OF KEY ACTORS IN E-BUS MODELS (2/2)

• Provide loans to operators, with appropriate conditions (i.e., interest rate, duration, grace
Commercial period), to purchase certain e-bus assets
lenders
• Provide lines of credit or guarantees to financial institutions, with explicit conditions for e-bus
lending
DFIs • Invest in SPV, possibly through blended structure to catalyze private investment
• Invest in SPV / asset owners, through equity or debt

Private investors
• In some cases – invest in assets, either directly or through SPV (via combination of equity,
Energy debt)
companies • Provide charging infrastructure and electricity
81
Investing in electric
bus deployment in
Latin America
Overview of opportunity and
market readiness
July 2020
Funder & Implementing Supporting Prepared By

Facilitator Partners Partners

Investing in Electric Bus Deployment in Latin America

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Document Informationclick to expand document informationAssists the ZEBRA Partnership with its goal of accelerating the transition to zero-emission buses across Latin American cities by highlighting the business case for electric buses, the current state of the market, and its potential for growth.

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Funder & Implementing Supporting Prepared By

Abstract & Authors

This report was developed by Dalberg, C40 Cities: ICCT: Dalberg:

The ZEBRA partnership is accelerating e-bus scale-up

Provides a global network of innovators,

CITY INVESTMENT SYNOPSES

A market transition is underway in Latin America

Scale-up of electric buses across Latin America1

Commitment Pilot Early scale-up Commercial scale

Notes: 1. “Electric bus” includes battery-electric buses and trolley buses. 5

Environmental, health, and economic factors are driving

For 2020-2022, the Latin America e-bus market exceeds

ZEBRA is working to mobilize USD 1 billion through new

E-bus projects offer a strong business case

TYPE OF BUS PROJECT-LEVEL IRRS1

• These IRRs are consistent with the level

And there is growing demand for financing at city level

Summary of completed transactions and pipeline

• Santiago – up to ~4,300 buses, 365

• Sao Paulo – up to 100 buses

To date, several institutions have committed financing

EXAMPLE: Celsia in Bogota

Through the signing of an “investor

ZEBRA offers dedicated support to these investor

Visibility Partnerships Knowledge

ZEBRA recognizes and ZEBRA aims to connect ZEBRA actively shares

CITY INVESTMENT SYNOPSES

Santiago Red Metropolitana de Movilidad (RED) ~6,800 buses

Bogota Sistema Integrado de Transporte Público (SITP) ~8,000 buses

Sao Paulo SPTrans ~14,200 buses

Mexico City Metrobus ~700 buses

Medellin Transporte Público Colectivo (TPC) ~6,400 buses

Market potential for electric buses2

400 $376 $366 • Opportunities in Medellin Transporte

POLICY TECHNOLOGY FINANCE

Mexico City Metrobus

Sao Paulo SPTrans

• National Electric Mobility Strategy (2017), Electric

• Strong support from new city government, National Law

• City government is developing a 2020-2026 Climate

• Sao Paulo has set pollution reduction targets via

• National Law 1964 mandates 10% vehicle electrification

Committed to procure only zero-

• Supply is expanding: three manufacturers have closed

• Yutong leading with trolley buses, as Metrobus completes

• Zhongtong has standardized 7.8m bus for Medellin

• 49 firms have bought the right to participate in the 2019/2020

• Many third-party asset owners and DFIs interested in market;

• Several third parties, including private transport and energy

• BNDES has attractive e-bus financing, with local content

• Lack of guaranteed cash flows in TPC currently impedes

CITY INVESTMENT SYNOPSES

Investment requirements SPV - equity SPV - debt Credit guarantee

Amount1 • 100-bus project (12m bus) – USD 30 million total investment

Commercial model Separation of all assets, through new contracts

Instrument Equity Debt; various levels of • Partial credit guarantee