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U.S. gives Iraq a $2.7 billion credit to buy military equipment

June 29, 2016
(FILES)--An Iraqi soldier stands atop an Abrams-M1A1 tank while another one jumps onto the ground during a training session with US troops on using the US-made main battle tanks at the joint Iraqi-American military base of Basmaya on the southern outskirts of Baghdad on March 15, 2010. Iraq on August 07,2010, took delivery of the first 11 of 140 American M1A1 Abrams tanks, just weeks before the US military ends its combat mission here and pulls thousands of its troops out of the country. AFP PHOTO/ALI AL-SAADI (Photo credit should read ALI AL-SAADI/AFP/Getty Images)

BAGHDAD — The United States has extended a $2.7 billion credit facility to Iraq for the purchase of military equipment amid the ongoing fight against the Islamic State group.

The U.S. Embassy in Baghdad said Wednesday that the deal gives Iraq a one-year grace period and eight and a half years total to pay for its purchases of ammunition and maintenance of its F-16s and M1A1 tanks.

Like other oil-reliant countries, Iraq's economy has been severely hit by plummeting crude prices since 2014, plunging the nation into an acute financial crisis. The OPEC member is struggling to feed a cash-strapped economy amid an expensive fight against IS militants, who still control key areas in the country's north and west.

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