May 26, 2016 / 8:32 AM / a year ago

Iraq gets initial accord for $3 billion Islamic Development Bank loans

Hoshyar Zebari speaks to Reuters in Baghdad September 11, 2014.Ahmed Saad

BAGHDAD (Reuters) - The Islamic Development Bank has given its initial agreement to provide $3 billion in easy loans and grants to Iraq, helping the nation cope with a sharp decline in oil revenue, a central bank spokesman in Baghdad said Thursday in an email.

The spokesman did not give further details.

Iraq earlier this month agreed a $5.4 billion standby loan with the International Monetary Fund. Finance Minister Hoshyar Zebari, announcing the agreement on May 19, said the IMF loans could unlock $15 billion more in international assistance over the next three years.

Iraq's economy has been hit by the plunge in oil prices since mid-2014 and the country is expected to have a financing gap of $17 billion this year unless it can secure more funding, an IMF document obtained by Reuters showed. The cost of fighting Islamic State militants is another burden on the budget.

Reporting by Maher Chmaytelli; Editing by Toby Chopra

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