Britain will give more than £30 million to help the Iraqi government rebuild hospitals, schools and other vital infrastructure to allow those displaced by conflict to return home.
It will be the first donation to a newly formed fund which has been set up with the help of the government of Iraq and the World Bank.
Middle East Minister Alistair Burt, who is on a four-day visit to Iraq, said the aid package would provide support to the country’s people as they rebuild their “lives, businesses and economic independence”.
The package will see £16 million allocated to the Iraq Reform and Reconstruction Fund (IRRF) to help rebuild areas destroyed by Daesh, as well as £6.9 million for the rehabilitation of critical infrastructure and £10 million to support the ongoing humanitarian response.
The funds will also be used to “unlock Iraq’s economic potential”, generate jobs and boost the potential for enhanced future trade with the UK and other countries, while seeking to make Iraq more business-friendly.
Mr Burt’s visit also saw the UK and Iraq agree to a joint commitment to further strengthen bilateral relations.
The minister held talks with Iraqi president Barham Salih, the prime minister Adil Abdul Mehdi, and the foreign minister.
And he met the prime minister of the Kurdistan Regional Government, Nechirvan Barzani, and the prime-minister designate, Masrour Barzani.