The US  Export-Import (Exim) Bank will extend a $3bn credit line to Iraq to support the country in its reconstruction efforts, US Secretary of State Rex Tillerson announced on 13 February at the Iraq reconstruction conference in Kuwait.

“To signal its strong commitment, the US Exim Bank and the Ministry of Finance will sign today a $3bn memorandum of understanding (MoU) that will set the stage for future cooperation across key sectors of Iraq’s economy such as oil and gas, transportation and other commodities,” Tillerson said.

The government executive also pointed out that the US government-owned Overseas Private Investment Corporation (Opic) has five active projects in Iraq worth $250m, and is currently reviewing proposals for projects worth $500m.

The $3bn credit line to be extended to Iraq appears to be a last-minute decision, as sources in Washington were earlier quoted as saying that the government did not plan to announce further funding for Iraq during the conference.

A study conducted by the Washington-based World Bank Group has indicated that Iraq needs an estimated $88.2bn reconstruction fund following the 3-year war with the Islamic State of Iraq and Syria (Isis).

MEED understands that the $88.2bn expenditure is to be spread over six years, between 2017 and 2023, whereby the Iraqi government has committed to fund a total of $77bn. Government oil revenues are expected to fund $50bn, leaving a gap of $27bn, which is expected to be met by loans, grants and the private sector through public-private partnership (PPP) projects.