BAGHDAD: Iraq and Kuwait are considering a plan to pay the war reparations which Baghdad still owes its neighbour into a fund for Iraqi investments, the UN's envoy told AFP on Sunday.
Iraq, which pays five percent of its oil revenues into a UN reparations fund, is required to hand over another $18 billion (13.92 billion euros), the bulk of it to Kuwait.
Iraqi leaders have frequently called for oil-rich Kuwait to review its demands for payment.
"There is a proposal on the table that the amount still outstanding is reinvested in Iraq," Martin Kobler, the UN chief's special representative to Baghdad, said in an interview.
"So that this is in a kind of trust fund ...(and) the (UN) resolution is fulfilled, however the money is reinvested in Iraq for the benefit of the people of Iraq."
He continued: "I think this is a good proposal and the two parties are negotiating this."
Iraq has so far paid out $34.3 billion to claimants for ousted dictator Saddam Hussein's 1990 invasion of Kuwait, of which around $25 billion has gone to Kuwait.
Since Saddam's overthrow in the US-led invasion of 2003, Iraq has repeatedly appealed to Kuwait and other countries to waive tens of billions of dollars in compensation and debt payments.
Iraq also owes Kuwait around $16 billion for loans which Saddam took out to fund his 1980-1988 war against Iran that was largely bankrolled by the oil-rich Arab states of the Gulf.
Baghdad has also raised objections to a sea port being built by Kuwait on Bubiyan Island that Iraq fears will strangle its shipping lines.