China has agreed to finance a much-needed overhaul of the Malian stretch of the key railway line between Bamako and Dakar, the Malian transport ministry said on Monday.

The renovation, costing $1.4 billion dollars, comes after China last week said it would also finance the Senegalese part of the line, for over $1.1 billion.

The Bamako-Dakar line, around 1,300 kilometres (800 miles) long, is vital for trade between Mali and Senegal but has been in bad shape, hampering smooth exchanges.

The contract between Bamako and state-owned China Railway Construction Corporation International for the 600-kilometre railway stretch running through Mali was signed on Saturday, the ministry said.

The deal also includes the training of engineers and technicians, an overhaul of 22 train stations and the construction of a domestic railway line.

The Chinese funds were loaned to Mali at an interest rate of two percent or lower and are to be repaid over 30 years.

The railway is key to the trade of landlocked Mali, as part of its goods transit through the Senegalese port of Dakar.

Mali and Senegal revoked a 25-year operating concession awarded to Advens after only 12 years, accusing the French company of neglecting the upkeep of the line.