ADB Approves USD 1 Billion Loan for Davao City’s Electric Bus Fleet Project

July 2023

The Asian Development Bank (ADB) has greenlit a momentous USD 1 billion loan to support the implementation of a city-wide public transport initiative in Davao City. As the first project of its kind in the Philippines to deploy electric bus fleets on a large scale, the venture aims to advance the country’s endeavors in reducing greenhouse gas emissions and promoting climate action.

Dubbed the “Davao Public Transport Modernization Project,” this trailblazing effort stands as ADB’s most substantial road-based public transport project in the Philippines. Serving as a pilot program, it is set to revolutionize the country’s public road transport system, as outlined in ADB’s official statement.

The project will witness the procurement of a contemporary fleet, with approximately 1,100 electric and Euro 5-standard diesel-fueled buses, with private sector management under performance-based contracts. This innovative fleet is anticipated to slash 60 % of annual greenhouse gas emissions from public transport in Davao City, making a significant stride in the city’s climate-conscious initiatives.

Shuji Kimura, ADB Senior Transport Specialist for Southeast Asia 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.” The project’s positive impact extends beyond climate goals, with particular emphasis on enhancing the lives of vulnerable populations, including women and young individuals who heavily rely on public transport daily.

The venture encompasses comprehensive enhancements, comprising around 1,000 bus stops with well-lit shelters, 5 bus depots, and 3 bus terminals. Moreover, it will introduce an intelligent transport system, integrating a bus location system, automatic fare collection mechanisms, and Wi-Fi connectivity within buses, terminals, and depots, enhancing the overall public transport experience in the city.

Furthermore, the project is backed by a social development program that aims to address and mitigate any potential adverse impacts related to Davao City’s transport sector restructuring. This includes providing livelihood opportunities for affected public utility jeepney drivers, operators, allied workers, and their families, exemplifying ADB’s commitment to inclusive and sustainable development.

Co-financing for the project is sourced from the ASEAN Infrastructure Fund, with a USD 10 million loan under its ASEAN Catalytic Green Finance Facility (ACGF), and the Green Climate Fund, contributing a USD 50 million loan under ACGF’s Green Recovery Program. Additionally, ADB will deliver USD 1 million in technical assistance to support the Department of Transportation and the Davao City local government in enhancing staff capacities for effective bus operations and seamless project implementation.

(Source: Technode Global)

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