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Iraq to spend US $5.5bn loan on electricity sector

IMF loan could be used to pay General Electric for 56 power turbines

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Iraq has not confirmed exactly how the loan will be spent.
Iraq has not confirmed exactly how the loan will be spent.

By Kevin Baxter

An Iraqi banking official has said that the US$5.5 billion loan the country is due to receive from the International Monetary Fund (IMF) will be spent on improving its electricity sector.

"The Fund set a condition that the loan should be used on State strategic projects, not on issue such as salaries," Modhihir Mohammed Salih, adviser of the Central bank of Iraq (CBI), is quoted by Aswat al-Iraq news agency as saying.

"It will be the first time for Iraq to use loans for development rather than wars," he added.

Salih did not say whether the money was going to be used to pay General Electric (GE) for the 56 power generation units it has bought from the company.

Iraq have to pay the loan back within five years at an interest rate of 1%.

Source: arabianoilandgas.com

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