Nigerian government has signed a Memorandum of Understanding (MoU) with a Portuguese firm that will lead to the construction of a 284 km standard gauge railway line in the northern part of the country.

In a statement reaching Xinhua on Tuesday, Nigeria's Minister of Transportation, Rotimi Amaechi, who signed the MoU on behalf of the West African nation with the Portugal-based Mota Engil Group, said the 1.959 billion U.S. dollar project will run through the northern states of Kano, Jigawa, and Katsina and reach a city in the neighbouring Niger Republic.

Amaechi said the rail line would help develop freight and passenger transport as it would be integrated with road transport.

"It would contribute greatly to the local economy as well as the nation's social sector," the Minister said.

According to Amaechi, the duration for the project is 36 months and the contract type is engineering, procurement, and construction.

The Nigerian government has in recent years stepped up modernisation of its railway lines across the country, with a standard gauge railway line connecting the capital city Abuja and Kaduna commissioned in 2016 and another one connecting the economic hub Lagos and Ibadan that's expected to be commissioned in 2021.