In a time when you are bhukka like Nepal and want to apply for credit, any lender that would lend you good deal of credit should be highly appreciated. 1 Billion dollar is a lot for development, if planned well. It can be wisely invested on Hydropower, sustainable farming, and many money generating industries for self dependency.
So why is India helping Nepal?
India knows very well that Nepal has a religious/cultural ties with India, and due to the open border between the countries, there is a constant flow of anything good/bad happening in Nepal that could ultimately impact India. India is in a highly ambitious mission to become one of the richest and powerful (though it is already one) nations in the world. With the constant flux of people/culture/values/, its pegged monetary value, open employment policies between the countries, I think India cannot afford Nepal to be in poverty, underdevelopment, and more importantly it cannot afford to have anti-India sentiments from Nepalese. I always wished that our SAARC nations would come come together and become as powerful as EU (and it more than possible given its resources, young population...). I think Modi also wants to do something similar.

Terai tira ko jagga le aba aakash chuncha, trust me it would be hot asset in less than 20 years. In Bardiya, India has already started investing in connecting several villages with ultra modern highways. Up and Bihar ko raya sanga jodine nepal ko terai ka gau haru ma yatayat ko ramro subidha bha bhani India lai ni dherai phaida cha.

Next big thing India doing for itself is it is targeting China through Nepal's diplomatic policies. China khaate haru le Nepal lai kehi gardainan, ra Nepal ko samasya ra hawa le China lai katti ni prabhabhit naparne huna le they don't give a damn about Nepal.