Sao Paulo has secured two international loans totaling US$496.6 million to electrify its public bus fleet. The funds could finance more than 1,100 additional e-buses.
Sao Paulo is driving forward the electrification of its bus fleet.
Image: Volkswagen Truck & Bus
The Brazilian metropolis has formalised two loan agreements worth US$248.3 million each with the Inter-American Development Bank (IDB) and the International Bank for Reconstruction and Development – which are both part of the World Bank Group. Together, this will provide $496.6m to further electrify and modernise public bus transport. Mobility Portal was the first to report on the conclusion of both financing agreements.
It is important to distinguish between financing and concrete procurement: the city estimates that the two programmes together could support the electrification of more than 1,100 buses. However, this does not mean that an order for 1,100 vehicles has already been placed. The loans will help finance both the vehicles and additional measures related to electric bus operations.
Funding for 582 electric buses
The use of the IDB loan is more specifically defined. It includes, among other things, financial support for the procurement of around 582 electric buses. Additional funds are earmarked for digital applications, technical studies, and the planning and monitoring of public transport.Disbursement of funds will take place over five years across five tranches, and will be outcome-based; focusing on targets such as the number of electric buses actually deployed and the use of new digital platforms. Before the first disbursement, the city must also submit an action plan to optimise its charging infrastructure.
The World Bank loan meanwhile amounts to $248.3 million, of which $243.05 million will be allocated to the decarbonisation and modernisation of the bus fleet. The funds will, among other things, offset some of the higher procurement costs of electric vehicles compared to diesel buses. Additional money will flow into traffic management and implementing measures around more sustainable local transport.
Unlike the IDB loan, the World Bank funds do not specify a concrete number of electric buses to be financed. The figure cited by the city – of 1,100+ vehicles – should thus be interpreted as an estimate of the combined financing capacity of both programmes.
São Paulo sees rapid expansion of electric bus fleet
The new financing comes just as the city’s fleet transition undergoes a rapid acceleration. In June alone, São Paulo put 500 battery-electric buses into operation – increasing its electric fleet to 1,759 vehicles, including 1,570 battery-electric buses and 189 trolleybuses. Conversely: only around 460 electric buses were in operation at the start of 2025, according to the International Council on Clean Transportation (ICCT).
With 1,759 EVs, São Paulo already has the largest e-bus fleet in Brazil, though it still trails Santiago de Chile in South America. As of February 2026, 4,222 electric buses were already in operation there. Over half of the 500 most recently added e-buses come from BYD. The Chinese manufacturer has delivered 265 vehicles, meaning it now has nearly 550 electric buses in São Paulo. BYD produces the chassis for its electric buses in Campinas, Brazil, and battery systems in Manaus.
In parallel with the fleet ramp-up, São Paulo has announced that it will no longer procure buses that run exclusively on diesel. As part of its target programme for 2025 to 2028, the city aims to replace a total of 2,200 diesel buses with vehicles powered by cleaner drivetrains.
This shifts the challenge increasingly from individual vehicle procurement to financing and infrastructure for a large-scale fleet transition. In particular, the charging infrastructure action plan required by the IDB programme shows that grid connections, charging capacity and depot operations must also be expanded accordingly.
According to city officials, the 1,759 electric buses already in operation are expected to save around 57 million litres of diesel annually and reduce CO2 emissions by approximately 130,000 tonnes. These figures come from the city and have not been independently verified.
