The U.S. will extend a $2.7 billion foreign military finance credit facility to Iraq under a deal announced by the U.S. Embassy in Iraq Wednesday.
The deal, signed by U.S. Ambassador Stuart Jones and Iraqi Minister of Finance Hoshyar Zebari, will allow Iraqi security forces to defer payment for the purchase of ammunition and maintenance of its F-16 aircraft and M1A1 Abrams tanks.
The agreements grants Iraq a one-year grace period and 8 1/2 years in all to pay for military purchases, the embassy statement said.
Under the current strategic framework agreement between the U.S. and Iraq, work is being done to ensure that Iraq's current economic challenges do not affect the continuing campaign to defeat the Islamic State terrorist group, the embassy said.
The announcement comes after news Sunday that the Iraqi army had "fully liberated" the city of Fallujah, which IS took over in 2014.
Last week, the U.S. Army awarded a $30.9 million contract to BH Defense for work on the Iraq International Academy in Baghdad.
Also this month, the U.S. State Department approved a possible foreign military sale to Iraq for AC-208 Combat Caravan sustainment, logistics and spares support worth $181 million.
By Geoff Ziezulewicz
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