Arab News Japan

TOKYO: Japan will provide Iraq with 32.7 billion yen (nearly $300 million) in loans to establish a new plant that helps the refining operations at the Basra refinery. According to the Foreign Ministry in Tokyo, representatives of Japan and Iraq exchanged notes on this deal in Baghdad on October 4.

 The plant will process a fluid catalytic cracking unit that uses residual oil to produce petroleum products.

 The ministry said that Iraq’s oil sector is the country’s largest core industry, accounting for about 90% of national revenues, and almost the only foreign currency-earning resource.

 “Reconstruction of the oil sector is an urgent issue in Iraq, which faces recovery from the damage caused by ISIL. This loan improves the productivity of high-quality petroleum products at the Basra refinery, the largest in Iraq. Further, about 15% of the domestic gasoline demand will come from Iraq,” According to the ministry.

 The loan is expected to contribute to the revitalization of the Iraqi economy, and  by producing high quality petroleum products that meet international environmental standards, it is expected to contribute to Iraq’s economic and social recovery by reducing the environmental burden and transferring related technologies, the ministry said.

 Terms of the ODA loan include interest at 0.2% per year. The ministry noted that the interest rate for consulting services is 0.01%. Terms also say that the redemption period is for 40 years, including a 10-year deferment period.