Rock Rail, the UK Infrastructure Bank and Aviva, through its in-house capital unit Aviva Capital Partners, have formed a partnership to provide a new funding platform for zero emission bus financier ‘Rock Road’. The partnership, alongside a debt facility from UK Infrastructure Bank and HSBC UK, is committing an initial £100m to fund up to 250 zero emission buses and associated infrastructure.
Rock Road offers a finance solution for UK bus operators and public transport authorities to decarbonise their fleet, while minimising capital outlay and outsourcing key ownership risks around residual value and battery replacement. The partnership is establishing a scalable funding model to accelerate fleet decarbonisation, crowd in further private capital and in turn, reduce the reliance on public money to fuel the transition.
The partnership has already signed its first deal to fund 60 battery-electric buses that will be leased to The Go-Ahead Group and deployed on routes throughout London, reducing carbon emissions and improving air quality across the capital.
The Rock Road platform, owned by Rock Rail and Aviva, brings together organisations with extensive experience and a strong alignment of investment principles. Rock Rail builds upon experience in the rail sector to deploy a proven funding model that attracts long-term institutional capital and is well-placed to support the introduction of bus franchising. Aviva’s participation is essential to the development of Rock Road in the near term and the mobilisation of further private capital in the future.
The UK Infrastructure Bank highlighted zero emission buses as a key investment sector for net zero in its recent strategic update. The Bank is providing £50m debt financing to the platform in line with its twin mission to tackle climate change and boost regional growth. HSBC UK is also providing debt finance which will further support the development of the Rock Road partnership.
John Flint, CEO of UK Infrastructure Bank, said:
“The vast majority of the UK’s 36,500 buses are still diesel powered and so replacing these with a cleaner, greener alternative will be key in decarbonising the transport sector and achieving UK net zero targets. This will require a massive scale up of investment.
“The Bank’s financing has been crucial in helping to bring the innovative Rock Road leasing scheme to the market, which will reduce cost for operators and help improve the uptake of zero emission buses across the UK.”
Charlotte Jones, Chief Financial Officer at Aviva, said:
“Aviva is investing across the UK to stimulate growth, help communities get ready for the future and support the transition to net zero. This investment will make it easier for transport authorities to decarbonise their networks whilst continuing to provide a valuable public service.”
Mark Swindell, CEO of Rock Rail, said:
“Rock Rail is delighted to be working with Aviva, the UK Infrastructure Bank and HSBC UK to invest in the decarbonisation of bus networks across the UK while supporting passenger transport authorities and bus operators to radically transform the regularity, punctuality and reliability of bus services.
“Since entering the UK rolling stock market in 2016, Rock has delivered over £3.5bn of investment in new trains and we see a similar scale of opportunity in the zero emission bus market.”
Anthony Browne MP, Decarbonisation Minister, said:
“It’s fantastic to see Rock Rail, the UK Infrastructure Bank and Aviva join forces to make it easier and quicker for operators to decarbonise their bus fleets, with a commitment to provide £100 million in funding for 250 new electric buses.
“This comes only days after we invested £143 million to roll out almost a thousand zero-emission buses all over England, as we continue to work closely with industry to provide passengers with modern and cleaner buses while growing the economy.”
To reach out to Rock Road directly, please contact: louis.swindell@rockinfrastructure.com
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Enquiries:
Philippa Terry (Aviva)
+44 (0)7385 537 458
Louis Swindell (Rock Road)
+44 (0)7500 707 993
Chris Ord (UK Infrastructure Bank)
+44 (0)7843 832 213
About Aviva Capital Partners:
- Aviva Capital Partners (ACP) is Aviva’s in-house capital unit that utilises the company’s financial strength to invest in a range of infrastructure projects and deliver returns for our retirement customers.
- ACP takes on a broader spectrum of risks where our equity can unlock larger scale assets.
- For more details on ACP, visit Aviva Capital Partners.
About Rock Rail:
- Rock Rail is an independent developer, owner and asset manager of rolling stock and other rail infrastructure.
- Since 2016, it has secured £3.5 billion of institutional investment in new, state-of-the-art rolling stock across seven fleets of trains in the UK and Germany, helping transform passenger journeys and delivering enhanced value for money to the public sector.
- Rock Rail provides a vehicle for institutional funders to invest their low-cost source of capital directly into the decarbonisation of public transport and aims to take key risks on behalf of operators.
About UK Infrastructure Bank:
- The UK Infrastructure Bank was announced as part of the Government’s National Infrastructure Strategy in 2020 and launched in June 2021.
- The Bank has £22bn of finance to deploy on projects which help tackle climate change and to support regional and local economic growth.
- The Bank is operationally independent from Government and projects are assessed by the Bank and approved through an Investment Committee.