UK's FirstGroup partners with Hitachi to lease electric bus batteries in $124 million deal

(Reuters) - British transport operator FirstGroup said on Friday it will form a joint venture with Japan's Hitachi for leasing up to 1,000 electric bus batteries for about 100 million pounds ($123.9 million) as part of its fleet expansion plan.

As part of the agreement, NextGen AssetCo, a 50-50 joint venture between FirstGroup and Hitachi ZeroCarbon, will purchase the batteries, which will then be leased to First Bus over an eight-year period. The lease can be extended by two years.

The Aberdeen-headquartered FirstGroup said the partnership is expected to contribute about 3 million pounds per annum to the group adjusted earnings by fiscal year 2026 before any potential operational benefits.

FirstGroup expects about 20 million pounds of savings in the 2024 financial year's capital expenditure, along with future savings of about 40 million pounds to the 2027 fiscal.

($1 = 0.8071 pounds)

(Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Mrigank Dhaniwala)