Kuwait will lend $1 billion to Iraq and commit a further $1 billion of investment to the country, Kuwaiti Emir Sheikh Sabah al-Ahmad al-Jaber al-Sabah told an international conference on Iraq's reconstruction on Wednesday.
Donors and investors have gathered in Kuwait this week to discuss efforts to rebuild Iraq's economy and infrastructure as it emerges from a devastating conflict with Islamic State militants who seized almost a third of the country.
"Kuwait will earmark $1 billion in loans to Iraq and will commit to another $1 billion as investments in Iraq," said Sheikh Sabah.
Iraq declared victory over Islamic State in December, having taken back all the territory captured by the militants in 2014 and 2015. The fighters have also been largely defeated in neighbouring Syria.
Rebuilding Iraq after three years of war with Islamic State will cost more than $88 billion, with housing a particularly urgent priority, Iraqi officials say.
At the same conference the United States said it was extending a $3 billion credit line but was not providing any direct government assistance. International NGOs have so far pledged $330 million in humanitarian assistance.
Iraq has suffered from decades of war and it is striking that it is holding its reconstruction conference in Kuwait, which it invaded in 1990, leading to defeat by a U.S.-led coalition and more than a decade of sanctions.
Kuwait will celebrate Liberation Day from Iraq in two weeks and Iraq still pays it reparations.