Iraq approves treasury bond sale

BOND SALE: Iraq government plans to plug budget deficit and fund electricity and rail projects. (Getty Images)

Iraq's cabinet approved the sale of treasury bonds worth $3 billion on Sunday, and the sale now awaits parliamentary approval, the government's spokesman said.

Ali al-Dabbagh said Iraq planned to sell one tranche of one-year bonds, worth $2.4 billion, to fund electricity projects planned for inclusion in the 2010 budget, and another $600 million of bonds to pay for electricity and rail projects.

The bonds will pay a return of "no less than" 2 percent, but there was no timeline for parliament to ratify the sale, Dabbagh said.

Iraq has said it planned to sell treasury bonds to plug an expected shortfall in its 2010 budget after a fall in oil prices since last year forced the government to slash this year's spending plans three times.

In a separate development cabinet also approved a bill that would subject all foreign oil firms to a tax on income of at least 35 percent, spokesman Dabbagh confirmed.

Iraq, which has the world's third-largest oil reserves, is now courting top global energy firms competing for major oil and gas contracts in the country. (Reuters)

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