The aid package will help improve services and boost the economy, which has been hit by the war and fall of oil prices
The World Bank on Tuesday announced an additional $1.5bn aid package for Iraq, to help the war-torn country implement reforms, improve public services and boost its economy.
The package includes loan guarantees from the UK for about $372m, and from Canada for about $72m.
"Despite an ongoing war and low oil prices, Iraq is undertaking bold transformational reforms that will safeguard economic stability and lay the foundations for longer term private sector development and inclusive growth for all Iraqis," said Ferid Belhaj, World Bank director for the Middle East.
The reforms also will help to expand social safety nets "to reach the most vulnerable segments of the population," he said in a statement.
The bank also approved $41.5m for a programme to improve management of the country's public funds.
With the new package, the World Bank engagement in Iraq rises to nearly $3.4bn, including support for reconstruction of areas recently recovered by government forces and a transport corridor investment.
In July, the International Monetary Fund (IMF) approved a $5.34bn loan for Iraq.
"Iraq has been hit with a double shock for an extended time period," Christian Josz, IMF mission chief for Iraq, told IMF News earlier this year.
He said the rise of IS has created "a humanitarian and social crisis" that resulted in millions of internally displaced refugees, harmed the country's infrastructure and disturbed trading routes.
"Second, the steep fall in global oil prices - on which Iraq depends almost entirely for its government revenue - has made the situation worse," Josz said.