Iran has allocated $1 billion in loans for infrastructure projects in Iraq, a senior Iranian official said ahead of a historic visit to Iraq by President Mahmoud Ahmadinejad.
The loans will be earmarked to reconstruction projects conducted by Iranian companies, Deputy Iranian Foreign Minister Ali Reza Sheikh Attar told the official IRNA news agency late Friday.
“Iran’s $1bn loan to Iraq was among the main issues discussed with the Iraqi side,” Attar said as he ended a visit to Baghdad as part of a high-ranking delegation paving the way for Ahmadinejad’s visit to Iraq due to begin on Sunday.
“The loan will be allocated to infrastructural projects carried out by Iranian contractors using Iranian goods and equipment,” said Attar.
The Iranian president also plans to inaugurate two power lines during his trip, Deputy Energy Minister Mohammad Ahmadian said.
He said one 400-megawatt electricity transmission line would run from the Iranian port city of Abadan to the Iraqi town of Alharasa, and another from Iran’s Marivan to Panjwin in Iraq.
A third electricity line supplying power to Khaneqin in eastern Iraq is already operational, Ahmadian said. Tehran has also signed a $150 million contract to build a 300-megawatt power plant in Baghdad, he said.
Some 10 other economic cooperation agreements will be signed between Iran and Iraq during Ahmadinejad’s visit along with the $1bn loan, which was first announced by Iranian officials last May.
“The political aim of the president’s visit is to materialise the idea of establishing durable peace borders between Iran and Iraq,” IRNA quoted Attar of the foreign ministry as saying.
The United States has long accused Iran of sending arms or fighters to help Shiite Muslim militias in Iraq to target U.S. troops, and both British and American commanders have described their fight in parts of Iraq a “proxy war” conducted by Tehran.
Iran, a Shiite Muslim country with close ties to Iraq’s majority Shiite population, has denied the allegations, saying it works to help improve security in Iraq because a stable Iraq will serve its interests.
However, Tehran is seeking to increase its regional influence and Iranian officials agree they play a strong role in Iraq, much as they do with the trade and aid they provide to Afghanistan on their eastern border.
Iraq and Iran were hostile to each other throughout Saddam Hussein’s regime and fought a long and destructive war during most of the 1980s. But when Saddam’s Sunni regime fell and Iraq’s Shiite majority took power after the 2003 US-led invasion, long-standing historical, religious and cultural ties between the Shiites of both countries flourished again.
Iran’s ambassador to Baghdad, Hasan Kazemi Qomi, said last August that Iran-Iraq trade in 2006 totaled $2bn – 97 per cent of that going from Iran into Iraq. Iranian Commerce Ministry officials say they hope trade will soar to $10bn in the next five years
Iran says it also wants to build an airport in Shiite holy city of Najaf and promises to help renovate important shrines. It has begun work on a railroad between Iranian port of Khorramshar and Basra in southern Iraq, connecting both countries rail systems. Tehran says it is also conducting feasibility studies to build two pipelines to carry oil from Iraq. (AP)
Iran offers Iraq $1bn loan for construction projects