GENEVA (Reuters) - The United Nations said on Tuesday it had accepted a proposal from Iraq to pay 0.5 percent of its 2018 oil proceeds toward compensation for $4.6 billion owed to Kuwait for destruction of its oil facilities during the 1990-91 Gulf War occupation.

Payments from the fund, which were suspended since October 2014 due to security and budgetary challenges faced by Iraq, will escalate annually until the end of 2021, the U.N. Compensation Commission (UNCC) said in a statement, adding that Kuwait had accepted the proposal.

“Based on oil price and export projections, this would result in payment in full of the outstanding claim award,” it said, referring to the claim by the Kuwait Petroleum Corporation, the largest approved by the Geneva-based UNCC.