The European Investment Bank (EIB) has agreed to provide a €30 million (£26.3m) loan to replace buses in Palma de Mallorca with less polluting gas-powered models.

The money will help transport firm Empresa Municipal de Transportes swap its existing diesel-powered vehicles with newer, safer and cleaner compressed natural gas (CNG) versions.

The agreement, which was signed under the Juncker Plan, will also finance the construction of a new refuelling station and the upgrading of IT, fleet management and ticketing systems.

The move is expected to help reduce pollutant emissions across Mallorca’s capital, as well as increase transport capacity and reduce operating and maintenance costs.

The launch of the new vehicles will begin this year and continue until 2023.

Violeta Bulc, European Commissioner for Transport, said: “These new buses will improve the daily lives of commuters, stimulate the local economy and put Palma de Mallorca at the forefront of the transition to low emission mobility.”