In what will be the first World Bank loan to Iraq in three decades, the institution said it would lend Baghdad $500 million for Iraq's development process.

"We made a commitment to support the development and reconstruction efforts using World Bank resources, if and when the Iraqi authorities request it," said Christian Poortman, the Bank vice president for Middle East and North Africa.

The loan is the first the Bank has granted Iraq since 1973 and the money is to be used "to address Iraq's urgent needs".

"We are drawing lessons from our ongoing trust fund operations to accelerate implementation so that the Iraqi people can feel the difference in their day-to-day lives - whether it is through improved school facilities, cleaner and reliable supply of water or better healthcare," Poortman said.