Iran, Iraq enhance energy ties in visit

NAJAF, Iraq, March 4 (UPI) -- Iraqi and Iranian energy ministers inaugurated construction of a power plant in Najaf, part of enhanced ties announced during the Iranian president's visit.

Iran has signed a number of deals to build power plants in Iraq and is in final talks to create pipelines sending Iraqi oil to Iran and refined products back to Iraq.

"These projects are funded by Iraq, but will be executed by Iranian companies," Iraqi Electricity Minister Karim Waheed Hasan said at a news conference Monday at the site of the future power plant north of the holy Shiite city of Najaf, the Voices of Iraq news agency reports.

Iranian Energy Minister Barweze Fatah said Iranian President Mahmoud Ahmadinejad intended to be at the ceremony but was tied up in meetings in Baghdad.

"This project renders the good relations between Iraq and Iran," he added.

Ahmadinejad is the first Iranian leader in Iraq since the 1979 Islamic Revolution in his country. Since then the two countries fought a deadly and costly war and funded insurgent groups. But the Shiite leadership in Iraq ushered in by the U.S.-led war is close to Tehran.

Ahmadinejad announced during his visit a $1 billion loan and signed seven economic and cultural deals, though details were not revealed.

Iran says it will supply Iraq with more electricity, along with two power plants -- the second in the Sadr City neighborhood of Baghdad.