The U.K. agreed Sunday to arrange loans worth US$12.3 billion to finance infrastructure projects in Iraq over a 10-year period, a program that would only benefit British companies, an Iraqi minister said in Baghdad.
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The two countries signed a memorandum of understanding in the Iraqi capital that serves as a framework to provide funds to specific projects during this period, including water, sewage, electricity, healthcare and transportation.
"This loan is exclusively allocated to British companies," Iraqi Acting Finance Minister Abdul Razzak al-Essa told a news conference at the signing ceremony. Interest rates will be set when the contracts are agreed upon, the minister said.
Fourteen years after the U.S.-led invasion and bombing of Iraq – which was orchestrated and carried out by U.S. President George W. Bush and U.K. Prime Minister Tony Blair that toppled the government of Saddam Hussein – the country still suffers from poor electricity and water supplies and a shortage of schools and hospitals while existing facilities are neglected.
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Hussein, who was held by the U.S. military, tried and subsequently hanged by a special tribunal, had nationalized the oil industry in the country and kicked out fossil fuel companies from the West. The Bush administration used the now-proven-false allegations that the Iraqi president, had weapons of mass destruction in order to regain access to the abundant Iraqi oil for Western corporations.
The oil-exporting country is also plagued by corruption that eats away at its crude sales income. Government finances have been further weakened since 2014 when oil prices collapsed.
The fall in oil prices coincided with the launch of the Islamic State group's offensive across Iraq which set off a new wave of violence, displacing more than three million people.