Iraq has awarded contracts to two Chinese firms to commence work on a $2 billion residential city near Baghdad, Bloomberg reported.

The contracts have been granted to East China Engineering Science and Technology Company and China National Chemical Engineering Company in collaboration with their Iraqi partner Shams Al-Binaa, the report said.

The Jawahiri project is part of a broader plan to construct five cities across Iraq, the report said.

The proposed city will include universities, commercial centers, schools and health centers.

New cities are proposed to be constructed in Karbala, Anbar, Nineveh and Babel provinces, Bloomberg said.

The news agency reported that the Iraqi government aims to build between 250,000 and 300,000 housing units for poor and middle-class families, citing Iraqi Prime Minister Mohammad Shia Al Sudani.