MANILA — The Asian Development Bank said on Thursday it approved a $1 billion (P55.3 billion) loan to the Philippines to deploy an electric bus fleet "at scale" in Davao City.

In a statement, ADB said the Davao Public Transport Modernization Project is its "largest road-based public transport project" in the Philippines. The project will serve as the "pilot for overhauling" the country's public transport system, it added.

The project will support the government's goal of procuring a modern fleet of 1,100 buses with operations managed by the private sector under performance-based contracts, the Manila-based lender said.

With the new fleet, about 60 percent of annual greenhouse gas emissions from public transport in Davao City are expected to be eliminated, the ADB said.

“The project is set to transform the quality of Davao City’s public transport and support the city’s rapid economic growth with a low-carbon and climate-resilient bus system,” said ADB Senior Transport Specialist for Southeast Asia Shuji Kimura.

“Not only will this support the Philippines’ climate goals, but it will help to improve the lives of vulnerable populations especially women and the young who use public transport daily," Kimura added.

The ADB said the project would serve about 800,000 passengers per day.

The project involves the construction of around 1,000 bus stops with bright lighting and shelters, 5 bus depots and 3 bus terminals as well as training for bus training, the lender said.

The intelligent transport system includes bus location system, automatic fare collection systems and Wi-Fi connectivity in buses, terminals and depots, the ADB said.

A social development program, such as livelihood opportunities for jeepney drivers, operators and other workers, is included in the project to mitigate the impact related to the restructuring of the city's transport system, it said.

The ADB said the ASEAN Infrastructure Fund is co-financing the project with a $10 million loan under its ASEAN Catalytic Green Finance Facility (ACGF) while the Climate Fund is providing a $50 million loan under the ACGF's Green Recovery Program.

A $1 million technical assistance will be delivered to support the Department of Transportation and the Davao City local government in developing staff capacities to oversee bus operations and overall project implementation, the ADB said.

Davao City is the country's third largest city in terms of population, the ADB said.

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