TEHRAN 

Iraq reached an agreement on Sunday to release frozen Iranian funds in the country, with the first installment expected in the coming days.

The two sides reached a tentative deal during a meeting between Iranian Energy Minister Reza Ardakanian and his Iraqi counterpart Majid Mahdi Hantoush in Tehran.

Hantoush arrived in Iran's capital on Saturday leading a high-level delegation to discuss continued energy cooperation between the two countries and settle his country's gas and electricity debt to Tehran.

Addressing a joint press conference, Ardakanian said Iraq agreed to settle the debt while pledging to continue exporting electricity to his country's western neighbor.

He also noted that a portion of the blocked funds would be used to import Russian Sputnik V vaccines against the novel coronavirus, as per the instructions of President Hassan Rouhani.

Ardakanian hastened to add that the "necessary arrangements" had been made with Baghdad and that the first installment of funds would be available in the "coming days."

For his part, Hantoush confirmed that the two sides agreed on resuming Iran's energy supplies to Iraq and had found ways to unblock the frozen funds.

More than $5 billion of Iranian funds remain trapped in Iraq, accounting for the export of gas and electricity, due to US sanctions.

During a visit to Baghdad last year, Iran's Central Bank head Abdolnasser Hemmati had reached an understanding with Iraqi officials on freeing the funds.

Since then, the two sides have discussed the issue at multiple levels.

The issue also figured prominently in discussions during a later visit by Iraqi Foreign Minister Fuad Hussein to Tehran in February for talks with Iranian officials.

Iran's state gas company had slashed gas supplies to Iraq in December last year over the non-payment of dues. Soon after, the two countries reached an agreement over the disbursement of the outstanding debt.

US sanctions have for several years prevented Iran from accessing its assets in several countries, including Iraq, with Tehran recently ramping up efforts to bring back the funds.

Earlier on Saturday, the visiting Iraqi energy minister also held talks with Iran's Oil Minister Bijan Namdar Zanganeh on oil and gas exports and the unfreezing of assets.

During the meeting, Zanganeh spoke of "two major gas export deals" between the two countries.

Iraq is heavily dependent on Iranian gas to feed its several power plants across the country, as well as on Iranian electricity to meet its energy needs.

Iranian envoy to Baghdad Iraj Masjedi on Friday said Hantoush's visit to Tehran was aimed at finding a solution to settle their debt and expand energy cooperation between the two countries.