Lagos State is one of the 36 States of the Federal State of Nigeria, and is divided into 20 Local Government Areas. Among the latter, 16 of them form Metropolitan Lagos. Metropolitan Lagos is one of the world's largest cities with a population estimated at approximately 17 million. The population is highly mobile and largely reliant upon public transport; however, the lack of an organized public transport network has led to inefficiencies in its provision and a low level of service to those who use it. Existing public transport has been widely described as chaotic, inefficient, expensive, low quality and dangerous both in terms of road traffic accidents and personal safety.

The proposed project involves a strategic engagement with Lagos State to support the development of two Quality Bus Corridors (QBC) (the Project). The development of the two QBC's will cost approximately US$50 million. IFC's proposed investment will be an A loan of the Nigerian naira (NGN) equivalent of up to US$50 million.The QBC's are part of the Lagos State Transport Master Plan Project (LSTMPP), an ambitious city-wide reform of the public transportation services in Lagos, which was developed in part with financing from the World Bank,and, some of which is being implemented by the Lagos Metropolitan Transport Authority (LAMATA). LAMATA is the transport planning, implementing, regulating and franchising authority of the Lagos State Government.

The two originally identified for IFC financing in 2018 were Command Abule Egba(6 km) and Ile Ile Ile Epo (4.3 km), both along existing road networks. The project activities will include road infrastructure improvement, rehabilitation of pedestrian walkways to improve walking conditions and accessibility to public transport services, rehabilitation of drainage, improvements of road junctions, provision of dedicated lanes for public transportation buses and construction of a new bus terminal for each QBC (a hub passenger pick up and drop off) and installation of a number of additional bus stops (laybys)/ flags at each QBC. Buses will be sheltered, maintained and refueled at a bus depot.

The SII for this transaction were updated to reflect that in 2024, the intended use of IFC proceeds changed to financing two different QBC packages (comprising four corridors). The four corridors are Ojuelegba – Idi Araba – Ilasamaja (3.5 km); Anthony – Oshodi (2 km); and Oshodi – Onipanu (4.1 km) (packaged together as QBC package 1); and Iyana Ipaja – Ayobo (9.3 km) (QBC package 2). The project activities remain the same as those of the original QBCs.

There is a combined population of around 292,000 persons within a radius of 400 meters around these two corridors and about 10,400 passengers pass through them per hour during peak hours. Considering 75% of this passenger traffic is with public transportation, developing these QBC's will help reduce travel times and improve road safety. The project will support improved access to jobs and services, while achieving environmental objectives of reducing air pollution and carbon emissions.

Pre-feasibility studies for both the QBCs were completed in 2021. Detailed project design and relevant environmental and social studies, including a project specific Environmental and Social Management Plan (ESMP) and Resettlement Action Plan (RAP), have been completed by the end of 2024. The construction works will begin in early 2025 and are expected to be completed by the end of 2026.