The United Arab Emirates' cabinet has approved plans for Etihad Rail, the developer of a railway network in the country, to borrow Dh4.7 billion ($1.28bn) to finance part of the construction, Dubai's Ruler said on Sunday.

"We also approved during the meeting for Etihad Rail to borrow Dh4.7bn to finance their new line to Al Ruwais," Sheikh Mohammed bin Rashid Al Maktoum, who is also UAE Vice-President and Prime Minister, posted on his official Twitter feed.

No other details were provided.

The rail network, which will cover 1,200 kilometres across the UAE and is projected to cost around $11bn, is being built in three stages. The line to Ruwais is part of the first phase.

In October, a contract worth Dh3.3bn was awarded to an Italian-UAE joint venture, consisting of Italy's Saipem , Tecnimont and UAE-based Dodsal Engineering & Construction PTE Ltd, to design, procure and construct the first stage's infrastructure.

The first stage of the rail network will link the western region cities of Habshan and Ruwais by 2013 and join Shah and Habshan by 2014.

Phase two of the project will connect Abu Dhabi to Jebel Ali in Dubai while the third phase will connect the northern emirates.

Contracts for the second stage are earmarked to be awarded in the third-quarter of 2012, its chief executive said in November.