France is to grant a €430-million (Dh1.88 billion) loan to Iraq whose economy has been weakened by low oil prices and its fight against jihadists, a French foreign ministry official said.
Foreign Minister Jean-Yves Le Drian made the announcement during weekend talks in Baghdad with Iraq's prime minister Haider Al Abadi and said the €430m would be released before the end of 2017, the official said.
"France was present from the beginning of the battles against Daesh [ISIL] and will be present as well during time of peace," said Mr Le Drian, who was accompanied by the defence minister Florence Parly.
The loan is aimed at helping the war-torn country implement reforms, improve public services and boost the performance of its state enterprises.
Mr Le Drian also handed Mr Al Abadi an invitation from the French president Emmanuel Macron to visit Paris.
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The visit by France's foreign and defence ministers come as Iraqi forces announced the ousting of the ISIL from the centre of Tal Afar, one of the group's last remaining strongholds in the north.
The advance, just days into an assault on the strategic town, comes six weeks after Mr Al Abadi declared victory over ISIL in second city Mosul.
One the plane to Baghdad, Mr Le Drian said that Iraq now faced the dual challenge of "a war that is coming to an end and the beginning of the stabilisation and reconstruction".
France is a key member of the US-led coalition that has been battling ISIL in Iraq and neighbouring Syria.
French forces have carried out air and artillery strikes in support of Iraqi operations against ISIL, which has lost much of the swathes of territory it had seized in 2014.
France, which refused to take part in the 2003 American-led invasion that brought down the dictator Saddam Hussein, is keen to participate in the reconstruction of Iraq.
The cost of reconstruction has been estimated at between US$700bn and $1 trillion.
