Bahrain Mirror- Reuters: Kuwait has approved a $100 million (77.89 million pounds) grant for Iraq to support humanitarian and reconstruction projects in areas retaken from Islamic State militants, an Iraqi official said on Tuesday.

The grant is the first Kuwaiti financial assistance to Iraq since Baghdad's occupation of the emirate from August 1990 to February 1991, ordered by then-President Saddam Hussein.

Officials from the two countries signed the grant agreement in Kuwait on Tuesday, a spokeswoman for Iraq's Reconstruction Fund for Areas Affected by Terrorist Operations said.

"The grant agreement signed today is an encouraging start for further future cooperation between Iraq and Kuwait," the reconstruction fund chief, Mustafa Al-Hiti, said in a statement. The fund aims to rebuild cities and territories recaptured from Islamic State, the ultra-hardline jihadist group which declared a "caliphate" over parts of Iraq and Syria in 2014.

The war with Islamic State escalated as crude prices tumbled, curtailing the Iraqi government budget as it relies almost exclusively on oil sales.

Saddam was toppled by the U.S.-led invasion of Iraq in 2003.

Iraq and Kuwait are now close allies against militant Islam.

Arabic Version