DUBAI, Jun 16 (Reuters) – A US$300 billion private fund aimed at stimulating investment in Iran is provided for in the framework agreement between the US and Iran, and more than half of that amount has already been committed, a source with direct knowledge of the agreement told Reuters.
The fund aims to offer both parties an economic incentive to reach a final agreement, said the source, who spoke on condition of anonymity as the plan has not yet been announced, as Washington and Tehran prepare to sign the deal this Friday.
U.S. and Iranian officials said Sunday they had reached an understanding on a framework agreement to end the war — which began when U.S. and Israeli forces attacked Iran on Feb. 28 — lift the U.S. blockade of Iran and reopen the Strait of Hormuz, a key supply route for global oil and gas.
The new fund is a private investment vehicle, not a reconstruction or reparations program, and will not include public money or subsidies, the source said, adding that companies based in the US, Gulf Arab countries, Asia, South America and Africa have agreed to commit to funding.
The promised investments cover the energy, logistics, manufacturing and transport sectors, the source said.
A high-ranking Iranian source told Reuters that Tehran had initially requested $400 billion in compensation for war damage caused by the US, but Washington had said it would not provide that amount.
It was then that the idea for the fund came up, which will be called the Reconstruction and Development Fund.
The mechanism envisages countries in the region contributing in various ways, the Iranian source said. This includes obtaining loans, establishing lines of credit or directly financing the reconstruction of war-damaged sites, including facilities such as the Mobarakeh steel complex, refineries, airports and, more broadly, conflict-affected infrastructure.
Iran, one of the largest economies in the Middle East, has hardly attracted significant foreign direct investment over the past four decades, having been excluded from global capital markets by successive waves of sanctions from the US and the international community.
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The country has the second largest proven natural gas reserves in the world and the fourth largest proven oil reserves.
It also has a young and qualified population of more than 92 million people, a diversified industrial base and significant untapped potential in sectors ranging from petrochemicals and mining to tourism and agriculture.
The investment fund is completely independent of a parallel track of negotiations on the lifting of US sanctions and the release of Iranian sovereign assets frozen abroad, the source said, describing the two as distinct financial mechanisms with different objectives and deadlines.
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The fund will not be created or come into operation until a final and satisfactory agreement is reached. The memorandum of understanding, once signed, aims to structure the process over the next 60 days.
“It will only be created once the final agreement has been signed,” the source said. “During these 60 days, fund managers will work with Iranians and investors to plan and scope projects.”
Iran’s foreign ministry and Pakistan’s foreign ministry, which helped broker the investment fund deal, did not immediately respond to requests for comment.
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A White House spokeswoman cited a CBS interview with Vice President JD Vance on Monday in which he said Iran could gain access to a $300 billion reconstruction fund backed by Gulf countries if it complies with a deal with Washington, including dismantling its nuclear program, eliminating its stockpile of enriched material and accepting a strict inspection and enforcement regime.
The source declined to reveal how the fund will be managed or by whom, noting that important details still needed to be defined.
The source cited companies from South Korea, Japan, Singapore, Malaysia and the United States among those making commitments, but declined to provide a complete list.
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The 60-day memorandum is a milestone, not a definitive agreement, and U.S. and Iranian negotiators are expected to work on multiple fronts during that period, addressing nuclear issues, sanctions and regional security.
