The Japan International Cooperation Agency (JICA) has signed an agreement with the Government of the Philippines to provide a loan of up to JPY38.101bn (approximately $330m) for the Manila Metro Rail Transit System.

The official development assistance (ODA) loan will be utilised for rehabilitation works on the Manila Metro Rail Transit System, which is also known as Metro Rail Transit Line 3 (MRT Line 3).

The rehabilitation project aims to minimise disruptions and improve overall operational safety and service level of MRT Line 3.

It is also expected to encourage the use of metro services among daily commuters, thereby reducing traffic congestion across the Metro Manila region.

The loan for the project has a maturity period of 40 years and a grace period of 12 years.

"The rehabilitation project aims to minimise disruptions and improve overall operational safety and service level of MRT Line 3."

The loan agreement also includes Special Terms for Economic Partnership (STEP), a set of special assistance terms that involves the transfer of Japanese technology and related expertise to the beneficiary country.

MRT Line 3 rehabilitation works will utilise Japanese diagnostic technology to determine maintenance requirements, as well as other technologies throughout the project period.

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Improvements will include track replacement, general refurbishment of 72 light rail vehicles and modernisation of the signalling system.

Associated rail infrastructure such as power supply, depot equipment, public address systems and CCTV will also be rehabilitated.

The project is expected to be completed by April 2021.

JICA offered more than $1bn for two Indian rail projects last month.