Japan will provide Iraq with $3.5 billion in loans over the three years from 2005, which -- along with a $1.5 billion grant for 2004 announced earlier -- will bring total Japanese aid to Iraq to $5 billion, government sources said Saturday.

Foreign Minister Yoriko Kawaguchi is expected to announce the loans at a ministerial meeting of international donors to Iraq in Madrid on Friday, the sources said.

Kawaguchi will discuss Japan's aid plan in individual talks with Paul Bremer, the U.S.-appointed civilian administrator of Iraq, Iyad Allawi, chairman of the U.S.-backed Iraqi Governing Council, and Spanish Foreign Minister Ana Palacio on the sidelines of the Madrid gathering.