Japan is providing additional official development assistance (ODA) loan of up to $2.1bn (JPY253.3bn) to support Phase 1 of the Metro Manila Subway Project in the Philippines.
In this regard, the Filipino government reached an agreement with Japan International Cooperation Agency (JICA).
This is the second tranche executed between the two parties.
The first tranche was signed in March 2018, under which JICA agreed to provide an ODA loan of $985m (JPY104.53bn).
Metro Manila Subway Project will see the construction of 27km underground railway line featuring 15 stations.
It is the first subway in the Philippines and will connect Valenzuela City in the northern part of Metro Manila to Pasay City in the southern part.
This project is expected to meet increasing transportation requirements, while easing traffic congestion in the Metro Manila region.
The loan will be used to build stations, underground tunnels between stations, a depot, and other public works. It will also be used to purchase rail systems and rolling stocks.
Besides, it will be utilised for consulting services such as tender assistance, construction supervision and Transit Oriented Development support.
Special Terms for Economic Partnership (STEP) will be applicable to the Japanese ODA loan for this project and for Japanese technology.
This covers construction in narrow areas, signal systems, underground tunnel excavation and vehicles being built in the project.
STEP refers to special assistance terms for promoting the visibility of Japanese aid by transferring Japanese expertise to developing nations.
“The main contract is Japan tied and subcontracting is general untied,” JICA stated.