External capital may be required in three cases:
- Alternative capital source. If the utility cannot (or prefers not to) finance the purchase of the batteries and charging infrastructure internally, it may seek external capital to provide the financing required. This could be done privately through a bespoke financial instrument, which could include a public debt or bond offering.
- Copayment to buy down the upfront cost to a level that is cost effective. If the bus service provider must make an upfront co-payment to cover a gap in cost effectiveness, grant funding or concessional capital can be raised to cover it.
Professional services for initial implementation in a specific market. The legal, consulting, and administrative fees associated with the first-time design and implementation of the PAYS system for a specific market can be paid by the utility, which may seek to have those costs covered by external grant funding as a public benefit.