Chinese and French officials signed an agreement last Friday that will secure a US$200 million loan from France earmarked for restoration and reconstruction projects in areas of Sichuan still recovering from last year's earthquake, according to a China Daily report.

The agreement, signed by Chinese deputy finance minister Li Yong and Jean-Michel Severino, chief executive officer of the French Development Agency (AFD) will provide US$200 million for reconstructing urban infrastructure in the hardest-hit areas and rebuilding domestic biogas units in rural areas. The loan agreement includes 20-year maturity and a seven-year grace period.

China and the AFD also signed a separate agreement for a loan of approximately US$100 million to fund a railway electrification project in Hunan and Guangxi.

The loans come during a time of thawing in China-France relations since last year's disruption of the Olympic torch relay in Paris.