The Japanese embassy in Baghdad announced today that Tokyo will lend the Iraqi government $270 million to help it improve its financial position.
"The amount is aimed at improving the dire financial conditions and reform the country's finances by helping the Iraqi government in its current administrative and financial reforms," Japanese Ambassador to Baghdad Fumio Iwai told a press conference after signing the loan agreement with the Iraqi finance ministry in Baghdad.
"The loan is part of Japan's commitment to provide financial assistance to Iraq, amounting to $500 million, in accordance with its commitments made at the G7 meeting in May 2016," he added.
Baghdad has received several loans from Tokyo since the second half of last year, worth $233 million, $195 million and $240 million, allocated to improve its financial situation and the development of power plants and networks.
Iraq needs external funding to fill its budget deficit which amounts to $21.44 billion this year, at a time when it is suffering from the drop in world oil prices and the costs of fighting Daesh in the north of the country.
Iraq is OPEC's second largest oil producer with a production rate of around 4.2 million barrels per day. Oil revenues account for up to 95 per cent of state expenditure.