Transport Minister M R Vijayabhaskar met a delegation from UK, an official release said.
The government decision was part of efforts to minimimse carbon emissions.
Of the 100 electric buses, 80 would be operating in Chennai and 20 in Coimbatore, the release said.
C40 Cities Finance Facility supports major cities to prepare and deliver climate change projects.
It is funded by German Federal Ministry for Economic Cooperation and Development, Government of United Kingdom and United States Agency for International Development.
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