The China Development Bank will offer 250 billion yuan (31.25 billion U.S. dollars) worth of loans at preferential interest rates to build railways in China in the five years from 2006 to 2010, said sources with the Ministry of Railways (MOR) on Friday.

The MOR signed an agreement with the CDB recently, giving priority to major railway projects.

China has launched a large-scale railway construction initiative focusing on improving transportation capacity and railway technology.

According to the government's plan for the five-year period from 2006 to 2010, China will invest a total of 1.25 trillion yuan and build 17,000kilometers of new railway track.

The CDB will also give financial support to railway-related sectors such as building, logistics, equipment and information, according to the agreement.

Under the direct jurisdiction of the State Council, the CDB is a government development-oriented financial institution which provides long-term funding for key projects -- such as infrastructure projects and strategic industries -- that are vital to the development of the national economy.

Source: Xinhua