Iraq pays final Gulf War reparations to Kuwait

Funds came from a 5 per cent tax on sales of Iraq's petroleum and petroleum products

Several blown-out wells damaged by retreating Iraqi soldiers in Kuwait's Al Ahmadi oil field in April 1991. AFP

Iraq has paid its last war reparations to Kuwait more than 30 years since the invasion of the Gulf country under former autocrat Saddam Hussein, officials said on Thursday.

On August 2, 1990, Hussein ordered his army to invade Kuwait and seize what he described as "Iraq's 19th province", before being pushed back seven months later by a US-led coalition.

"Iraq has closed the file of the Kuwait war reparations, having paid the last of its dues," Mozher Saleh, the prime minister's economic adviser told the official Iraqi News Agency.

In total, Iraq has paid $52.4 billion in reparations, he said.

"This is not a small amount," he said. "The sum would have been enough to construct an electricity network that would have served Iraq for many years."

Despite being rich in hydrocarbons, Iraq's electricity infrastructure has suffered from years of negligence and successive wars, and the country endures regular power cuts.

Mr Saleh said he hoped that the slice of budget previously allocated for reparations would now be directed to development projects.

The central bank on Tuesday announced the payment of the final portion of the reparations, valued at $44 million.

The payments were suspended in 2014 when ISIS took over large areas of Iraq but were resumed in 2018, following the group's defeat.

Funds for the reparations come from a 5 per cent tax levied on sales of Iraq's petroleum and petroleum products.

The compensation is distributed by a UN agency to claimants who suffered losses or damages as a result of the invasion.