CAIRO (Kyodo) Japan agreed in principle to extend around ¥80 billion in fresh loans to Iraq for three infrastructure-related projects during recent bilateral talks, sources close to the negotiations said Saturday.

During talks held in Baghdad on April 26, the first since the U.S.-led Iraq war broke out, Japan agreed to provide financial support for thermal power generation, water supply, and water power generation projects mainly in central Iraq, the sources said.

The two sides will finalize the loan amount later, they said.

Past talks had been held in the Jordanian capital Amman due to security concerns in war-ravaged Iraq. But the recent improvement in the security situation there allowed the latest round to be held in Baghdad.

Based on requests from the Iraqi government, Japan has decided to focus on areas in central Iraq other than Baghdad, the sources said. Japan has so far extended aid for similar projects in northern and southern areas, but the Sunni-dominated region has seen less of such support.

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