Dubai - A private investment fund worth US$300 billion designed to drive investment into Iran is one of the main components of the framework agreement between the United States and Iran. Sources with direct knowledge of the negotiations said that more than half of the fund has secured funding commitments from investors.
Reported by The Straits Times, according to the source, the investment fund is prepared to provide economic incentives for both countries to reach a final agreement. The plan has not been officially announced as Washington and Tehran are preparing to sign the agreement on Friday (19/6).
On June 14, US and Iranian officials stated that both countries had agreed on a framework to end the conflict that erupted after US and Israeli military strikes on Iran on February 28. The agreement also includes the cessation of the US blockade against Iran and the reopening of the Strait of Hormuz, a strategic route for global oil and gas supplies.
The new fund, to be named the Reconstruction and Development Fund, is a private investment vehicle, not a reconstruction program or war compensation. The fund will not use government budgets or state grants.
The source explained that several companies from the United States, Arab Gulf states, Asia, South America, and Africa have expressed commitment to invest. Promised investments cover the energy, logistics, manufacturing, and transportation sectors.
Investment Fund
Meanwhile, a senior Iranian source said Tehran had previously requested US$400 billion in war compensation from Washington. However, the US government refused to provide such compensation, leading to the idea of forming a joint investment fund as an alternative.
Through this mechanism, regional countries can contribute in various ways, such as guaranteeing loans, opening credit facilities, or directly financing the rebuilding of facilities damaged by the war. Several priority projects include the Mobarakeh steel complex, oil refineries, airports, and other strategic infrastructure.
As one of the largest economies in the Middle East, Iran has received almost no significant foreign direct investment over the past four decades due to various international sanctions that limited its access to global financial markets.
In fact, Iran has the world's second-largest natural gas reserves and the fourth-largest oil reserves. The country also has a population of over 92 million with relatively high education levels and a diverse industrial base, ranging from petrochemicals, mining, tourism to agriculture.
The source emphasized that the US$300 billion investment fund is separate from other negotiation tracks discussing the lifting of US sanctions and the release of Iran's frozen assets abroad.
The fund will only be established and begin operations after a final agreement is reached. The memorandum of understanding to be signed later will serve only as a 60-day framework to prepare investment projects.
"The fund will only be formed after the final agreement is signed. During those 60 days, fund managers will work with Iran and investors to design and determine the scope of projects," the source said.
US Vice President J.D. Vance previously stated that Iran could potentially gain access to a US$300 billion reconstruction fund supported by Gulf states if it complies with the agreement with Washington, including dismantling its nuclear program, eliminating enriched material stockpiles, and accepting a strict inspection and supervision regime.
