Iran-US framework includes $300 billion private investment fund

WASHINGTON/TEHRAN: A framework agreement between the United States and Iran includes plans for a $300 billion private investment fund aimed at encouraging investment in Iran, according to a source with direct knowledge of the arrangement cited by Reuters.

The source, who spoke on condition of anonymity because the plan has not yet been made public, said more than half of the proposed amount has already been committed. The fund is intended to provide both sides with an economic incentive to move towards a final agreement as Washington and Tehran prepare to sign the deal on Friday.

US and Iranian officials said on Sunday that they had agreed on a framework to end their war, which began when US and Israeli forces attacked Iran on February 28. They also said the understanding would halt the US blockade of Iran and reopen the Strait of Hormuz, a major route for global oil and gas supplies.

According to the source, the planned mechanism is a private investment vehicle rather than a reconstruction or reparations programme, and it will not involve government funding or grants. Companies based in the United States, Gulf Arab states, Asia, South America and Africa have agreed to provide financing, the source said.

The source added that the pledged investments cover sectors including energy, logistics, manufacturing and transport. The fund is to be called the Reconstruction and Development Fund.

A senior Iranian source told Reuters that Tehran had initially sought $400 billion from the United States as compensation for war-related damage, but Washington had refused to provide that amount. The idea of the new fund then emerged, the Iranian source said.

That source said the mechanism envisions regional countries contributing through several channels, including arranging loans, opening credit lines or directly financing the rebuilding of locations damaged during the war. The sites mentioned included the Mobarakeh Steel complex, refineries, airports and other infrastructure affected by the conflict.