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  • Writer's pictureBy The Financial District

ADB Extends $1-B Loan For Davao Electric Bus Project

The Asian Development Bank (ADB) has approved a $1-billion loan to modernize the public transportation system in Davao City through the procurement of over a thousand electric buses.

Photo Insert: AboitizPower subsidiary, Davao Light's electric bus fleet.

“The Davao Public Transport Modernization Project, ADB’s largest road-based public transport project in the Philippines, is expected to serve as a pilot for overhauling the country’s public road transport system,” the ADB said in a media release.

The multilateral institution said this would be the first project in the Philippines to deploy electric buses at scale, which would drastically cut greenhouse gas emissions.

“It will support the procurement of a modern fleet of about 1,100 buses with operations managed by the private sector under performance-based contracts. The new fleet is expected to reduce 60% of annual greenhouse gas emissions from public transport in Davao City, the country’s third-largest city by population,” the ADB said.

The modern bus transport system is expected to service about 800,000 passengers per day. The project will also include the construction of around 1,000 bus stops with shelters, five bus depots, and three bus terminals.

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Data on the ADB’s website showed that the transport system will also rationalize about 670 kilometers of bus routes to 30 routes from more than 120 public utility jeepney routes.

“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,” ADB Senior Transport Specialist for Southeast Asia Shuji Kimura said in the statement.

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“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,” he added.

The project will also establish an “intelligent transport system,” which includes a bus location system, automatic fare collection systems, and Wi-Fi connection. The multilateral lender also noted that there will be a social development program to mitigate any risks or impacts from the project.

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“The assistance will include livelihood opportunities for affected public utility jeepney drivers, operators, and allied workers and their families, among others,” it added. Training for bus drivers, operators, and staff will also be provided under the program.

The ADB said it has been providing technical assistance to Davao City since 2015 for the development of its new public transport system. The loan will also be co-financed by the Association of Southeast Asian Nations Infrastructure Fund ($10 million) and the Green Climate Fund ($50 million). Both facilities are administered by the ADB.

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Technical assistance of $1 million will be given to support the efforts of the Department of Transportation and the Davao City local government to train staff in overseeing the new bus system.

In 2022, the ADB extended $2.995 billion in financial assistance to the Philippines, including $2.55 billion in low-interest loans. This year, the ADB’s lending program to the Philippines is set at $4 billion.

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