New Delhi, Dec 12 (IANS): The government said Friday it had entered into an agreement with the World Bank for $1.1 billion loan for developing the Eastern Dedicated Freight Corridor (EDFC)-II .

According to the finance ministry, the agreement was signed Thursday to implement the EDFC-II project to augment rail transport capacity, improve service quality and enhance freight carriage.

The ministry said that the loan is meant for the EDFC-II's 393 km Kanpur-Mughal Sarai secton.

It will also be used for the development of Dedicated Freight Corridor Corporation of India's institutional capacity to build, maintain and operate the entire DFC network.

The project is in continuation to the phase-I of the EDFC project presently being implemented by DFCCIL with a World Bank loan of $975 million on the Khurja-Kanpur stretch of the eastern rail corridor (Ludhiana-Delhi-Kolkata).

"The project will directly benefit the power and heavy manufacturing industries of northern and eastern India, which rely on railway network for transportation purposes," the ministry said in a statement.