The money is part of a $1 billion credit line India proposed for its eastern neighbor to develop ports and related infrastructure, said Musharraf Hossain Bhuiyan, secretary of the economic relations division of the Finance Ministry.

“The Indian government has already asked the relevant ministry to disburse the credit for implementing nearly two dozen infrastructure projects under the $1 billion credit agreement signed in August last year,” Bhuiyan said.

“The most important from our point of view of course are the two agreements on interim (water) sharing arrangements for the Teesta and Feni rivers,” Foreign Minister Dipu Moni told a news conference.

She said Bangladesh decided to “provide connectivity for the countries of the region, particularly in view of obvious geographical exigencies, to Nepal, Bhutan, and India.”

“We are in the process of developing those linkages that will facilitate connectivity, including by rail, waterways, road and air.”

Singh’s visit is widely seen as a demonstration of India’s willingness to have closer understanding and cooperation with the small neighbor, and remove decades of mistrust.

New Delhi also wants Dhaka to allow better transit links across Bangladesh to land-locked north-eastern Indian states.

Bangladesh has offered India the use of the Chittagong and Mongla ports to improve bilateral and regional trade.

But opposition parties, including former prime minister Khaleda Zia’s Bangladesh Nationalist Party, oppose such moves, saying they would bring more benefit to India than Bangladesh.

The minister said Dhaka was also expecting to sign a deal during PM Singh’s visit to buy 250 megawatts of electricity from India.