A statement issued by the Ministry of Shipping said the loan would provide a major boost to India's inland waterways project.
"The (NW-1) project would enable commercial navigation of vessels with capacity of 1500-2,000 DWT," it said.
The 1,390 kilometres-long Ganga waterway from Haldia to Varanasi is being developed under the Jal Marg Vikas Project (JMVP) at an estimated cost of Rs 5,369 crore.
It passes through Uttar Pradesh, Bihar, Jharkhand and West Bengal, serving the major cities of Allahabad, Varanasi, Ghazipur, Bhagalpur, Patna, Howrah, Haldia and Kolkata.
"The rail and road corridors in this region are heavily saturated. Hence, the development of NW-1 would provide an alternative, viable, economical, efficient and eco-friendly mode of transport," the Shipping Ministry said.
"The waterway will act as a catalyst in the socio-economic development of the region by creating new business and employment opportunities."
The ministry added that while work had started to construct multi-modal terminals at Varanasi (Uttar Pradesh) and Sahibganj (Jharkhand), the construction of multi-modal terminal at Haldia (West Bengal) would "begin soon".
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