CAPE Town has been awarded a €19m (just over R200m) Orio grant by the Dutch government, mayor Patricia De Lille said on Thursday.

Orio is a grant facility for infrastructure development, financed by the Netherlands ministry of foreign affairs, that supports governments in developing countries in their efforts to boost infrastructure developments in partnership with the international business community.

Speaking during the first council sitting of the year on Thursday, Ms de Lille said this external funding, which will work in conjunction with funding from the national government for the integrated rapid transit system roll-out, would go towards the project of building a "sustainable, road-based public transport infrastructure and services" in the southeast of the city.

"The project includes a trunk route for the bus service linked to the N2 express service, nonmotorised transport projects, five public transport interchanges and allocations for maintenance and socioeconomic business planning," Ms de Lille said.

"This funding will enable us to realise our vision to connect the people of the southeast of the city, including the people of Khayelitsha and Mitchells Plain, with places of economic opportunity in Cape Town."

The city intends implementing phase 2 of its MyCiti bus service this year, which will include the Cape Flats.