(REUTERS) – Britain has agreed to arrange 10 billion pounds ($12.3 billion) in loans to finance infrastructure projects in Iraq over a 10 year period, Iraqi Acting Finance Minister Abdul Razzak al-Essa said on Sunday.

Only British companies can be contracted to carry out projects funded by these loans, he told a news conference in Baghdad. “The interest rate on the loans should be determined by the British companies,” he said. “This loan is exclusively allocated to British companies.”

The two countries agreed to sign a memorandum of understanding that will serve as a framework to provide funds to specific projects during this period, the finance ministry said earlier in a statement.

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