Britain has agreed to arrange 10 billion pounds in loans to finance infrastructure projects in Iraq over a 10-year period, Iraqi Acting Finance Minister Abdul Razzak al-Essa said on Sunday.

Only British companies can be contracted to carry out projects funded by these loans, he told a news conference in Baghdad. “The interest rate on the loans should be determined by the British companies,” he said. “This loan is exclusively allocated to British companies.”

The two countries agreed to sign a memorandum of understanding that will serve as a framework to provide funds to specific projects during this period, the finance ministry said earlier in a statement.

“The aim of the loan is to finance infrastructure projects including water and sewage, over a period of 10 years,” it said.

Britain is a main partner in the US-led coalition helping Iraq defeat ISIS, the hardline Sunni group that overran about a third of the country in 2014.

Fourteen years after the US-led invasion that toppled Saddam Hussein, the country still suffers from poor electricity and water supplies and a shortage of schools and hospitals, while existing facilities are neglected.

The oil-rich country is also plagued by corruption that eats away at its crude sales income. Government finances have been further weakened after 2014 when oil prices collapsed.

The fall in oil prices happened with the launch of Islamic State’s offensive across Iraq which set off a new wave of sectarian violence, displacing more than three million people.

US-backed Iraqi forces pushed the militants back and are besieging them now in their last major urban stronghold, on the western side of the city of Mosul, in northern Iraq.

Source : Al Arabiya