Equity Bank has entered the fast-growing market for vehicles powered by liquefied petroleum gas, also known as autogas, with loans of up to Sh200,000 for motorists seeking to convert their units from petrol and diesel.
In a deal between the lender and Proto Energy, loan beneficiaries will have a 30-day grace repayment period for the loans, which have an interest rate of 16.6 percent.
Equity Bank's entry signals the allure of a market where motorists have largely self-funded the conversion of their vehicles to autogas amid skyrocketing prices of petrol and diesel.
The deal comes as the cost of petrol and diesel has significantly increased, with a litre of either costing at least Sh14 more compared to a litre of autogas, pushing more motorists to seek cheaper alternatives.
A litre of diesel and petrol is now retailing at Sh217.86 and Sh214.03 in Nairobi, in a price rally that had seen prices hit a historic high of Sh242.92 per litre of diesel in May this year amid the global disruptions caused by the Middle East conflict.
Autogas is averaging Sh100 per litre in Nairobi, offering motorists, especially those in the ride-hailing and public transport sectors, cheaper fuel and an opportunity to lower operational costs.
“Our partnership with Equity Bank addresses a critical barrier to LPG adoption by making financing more accessible. Whether it is a motorist converting to autogas or an institution transitioning, customers can now access financing alongside the technical expertise, infrastructure and reliable supply required to make that transition successful,” Joel Kamau, the CEO of Proto Energy, said.
“Through our partnership with Proto Energy, we are enabling motorists and institutions to access financing for LPG solutions while supporting the transition to cleaner and more efficient energy,” Moses Nyabanda, the Managing Director of Equity Bank, said.
An estimated 20,000 vehicles had been converted to autogas by the end of 2024, with more expected due to the rising cost of petrol and diesel.
It costs an average of between Sh67,000 and Sh120,000 to retrofit a petrol or diesel engine to autogas, and vehicles can switch between autogas and diesel/petrol seamlessly, enhancing driving range and flexibility.
