SKOPJE, Jan. 28 (Xinhua) -- The European Bank for Reconstruction and Development (EBRD) on Monday signed a loan agreement of 10 million euros (around 11.4 million U.S. dollars) for a project providing 35 compressed natural gas (CNG) buses to Macedonian capital Skopje.

The loan agreement signed at the Macedonian Finance Ministry aims to modernize the city's bus operations, enhance public transport and improve air quality.

Macedonian public enterprise (JSP) will also invest 1.8 million euros (around 2.06 million dollars) in the project, which will provide a fleet of 35 CNG buses to replace diesel buses and thus will cut CO2 emissions by at least 15 percent.

The Mayor of Skopje Petre Silegov, present at the signing ceremony, said that he expects that with the buses in operation, air pollution of the capital city, fuel consumption and maintenance costs will all be significantly reduced.