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Councils prepare regional bids to DfT zero emission bus fund


19 April 2021

Local authorities in England are preparing bids to the DfT’s new £120m fund for zero emission buses and associated infrastructure.  

The Zero Emission Buses Regional Area (Zebra) scheme  aims to deliver up to 500 zero emission buses and is part of the Government’s commitment to help fund 4,000 zero emission buses outside London. 

The DfT wants local transport authorities to lead consortia of energy companies, bus operators and manufacturers to make the bids. 

Grants will be allocated via two streams: a fast track process worth up to £70m and a standard process worth up to £50m.

Fast track expressions of interest must be submitted by 21 May, with complete business cases submitted by 30 July. Winners will be selected in August.

Expressions of interest for the standard process must be submitted by 25 June, with business cases in February 2022 when winners will be selected.

There is no minimum or maximum size for bids but the DfT is expecting to support at least three areas and expects bids to be for approximately £25m-£35m. 

The DfT will contribute up to 75 per cent of the cost difference between a zero emission bus and a standard conventional diesel bus equivalent of the same total passenger capacity. It will also  contribute up to 75 per cent of the capital expenditure for infrastructure, such as EV charging facilities. 

Zero emission capable buses – i.e. vehicles that are able to operate in emission-free mode for short periods – are ineligible for the funding. 

Operators normally purchase vehicles but Covid-19 has hit bus operator investment and interest is growing in leasing arrangements.

Says the DfT: “We encourage proposals from areas that may wish to utilise private finance or leasing models as part of their solution for zero emission buses, infrastructure or both.

“We note that using these methods can help reduce upfront capital costs and also help existing funds go further. This could include financing or leasing companies forming part of the consortia for the area.” 

The DfT will not offer any guarantees, underwriting, or  frameworks to sources of private finance. 

“The funding that we will be providing for this scheme will be capital,” says the Department. “We are interested in feedback on what support government could provide for private finance and leasing in the future.” 

Local transport authorities must provide letters of support from the bus operator(s) who will be operating the zero emission buses, with signatures from the national chief executive and local area managing director, committing to investing in the buses and operating them in the defined area for a minimum of five years. 

l Feature – pages 14-15

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