AFP - Iraq has signed an agreement to receive the first of two 250-million-dollar loans from the World Bank to help the country plug its budget deficit, the finance ministry said Thursday.

The announcement came around three weeks after the International Monetary Fund approved a 3.6-billion-dollar loan to the war-torn country.

"An agreement for a loan of 250 million dollars was signed with the World Bank," Finance Minister Baqer Jaber Solagh said in a statement, adding the loan was part of a 500-million-dollar package.

The loan, which is to be issued in cash, would help to "finance the 2010 public deficit," Solagh said.

Iraq projects a budget deficit of 19.6 billion dollars, or 27.1 percent of total expenditure, in 2010.

The IMF approved its loan to Iraq on February 24, saying it was to help the country meet "balance of payments needs" after the economy was hit hard by falling oil prices in 2009.

Oil revenues account for 85 percent of Iraq's government revenues.