"Iraq is a member of IDB and we have allocated 500 million US dollars to participate in the reconstruction of Iraq," Ali was quoted by the Bernama news agency as saying.
Ali made the remarks upon his arrival at the Sultan Salahuddin Abdul Aziz Shah airport flying in from Jeddah, Saudi Arabia.
The Jeddah-based IDB would finance projects in priority sectors such as education, vocational training, health, water and sewage, agriculture, food security, electricity as well as import and export of basic commodities and products, Ali said.
"We have also given humanitarian assistance to the people of Iraq," Ali added.
Ali is in Malaysia to attend the 30th annual meeting of the IDB Board of Governors and related events.
In late 2003 just before the Organization of the Islamic Conference (OIC) summit in Putrajaya, the OIC pledged at least 2 million US dollars for humanitarian assistance in postwar Iraq.
The IDB, an international financial institution under the OIC, aims to foster economic development and social progress among member countries and Muslim communities in accordance with the Islamic law.
The Board of Governors is the highest policy-making body of the IDB. Ministers of finance of the 55 member countries of the IDB are expected to attend the two-day meeting on June 23 in Putrajaya.