Inter-American Development Bank unit IDB Invest, World Bank Group‘s International Finance Corporation, and Chilean bank BancoEstado are lending US$344 million to finance the purchase of electric buses for the Santiago de Chile urban bus network.

The financing will allow Red Metropolitana de Movilidad, Santiago's public transit system, to obtain 992 e-buses to replace part of its existing diesel bus fleet, and reduce its carbon footprint. This will be the world's largest e-mobility urban public transport fleet outside of China.

Under a concession model which separates fleet ownership from operation, the buses will run under 14-year bus supply leasing contracts with Chile's Ministry of Transport and Telecommunications. Allen & Overy advised the three co-lenders.

The lessor of the buses, Kaufmann Group, said the support of IFC, IDB Invest, and BancoEstado has allowed resources to be mobilized under credit terms that are not readily available in the market, especially for public transport projects.

This support translates into the possibility of providing the city and all public transport users of Santiago with 992 Foton electric buses in addition to those already in operation.

Foton is based in Beijing, and Chile is currently its biggest overseas market in terms of operational buses and units on order.

Through Andes Motor in Chile, Kaufmann Group has reached 1,300 buses of this brand in operation, the largest fleet of e-buses in the Americas.

In 2011, Santiago became the first city in Latin America to adopt ultra-low sulfur diesel and gasoline fuel standards. In 2014 Chile became the first Latin American country to adopt a joint carbon dioxide and pollutant tax, which applies to light-duty vehicles, trucks, and sports utility vehicles.

Transport is the fastest-growing contributor to climate change, and thus represents a prime target for decarbonization, according to IFC. E-buses represent a dynamic segment, with the global electric fleet projected to grow from 600,000 buses in 2020 to 1.6 million in 2025 and 3.6 million by 2030.

In Chile, transport contributes to nearly 25% of CO2 emissions and is responsible for 40% of Santiago's air pollution.