- It is key to a US-Iran peace framework.
A proposed $300 billion private investment fund aimed at unlocking large-scale investment in Iran has already secured commitments for more than half of its target amount, according to a source with direct knowledge of the arrangement.
The fund forms a key part of the framework agreement reached between the United States and Iran and is intended to provide both countries with a strong economic incentive to finalise a broader peace deal. According to sources cited by Reuters, Washington and Tehran are preparing to sign the framework agreement on Friday, although details of the investment mechanism have not yet been formally announced.
While reports have previously mentioned the existence of the fund, Reuters has learned for the first time that over 50 per cent of the planned capital has already been pledged. The source said the vehicle will be financed entirely through private-sector investment rather than government contributions.
Framework Deal Aims To End Conflict
US and Iranian officials said on Sunday that they had agreed on a framework designed to bring an end to the conflict that began when US and Israeli forces attacked Iran on February 28. The proposed agreement would also halt the US blockade of Iran and reopen the Strait of Hormuz, one of the world’s most important routes for oil and gas shipments.
The investment fund is expected to play a central role in supporting economic recovery and encouraging long-term cooperation between both sides as negotiations move forward.
The source said the initiative is structured as a private investment vehicle rather than a reconstruction programme or a system of war reparations. No government funding, grants or public money will be included.
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Global Investors Back New Initiative
According to the source, companies based in the United States, Gulf Arab nations, Asia, South America and Africa have already agreed to provide financing.
The pledged investments span a range of sectors, including energy, logistics, manufacturing and transport. Officials believe these industries could help stimulate economic activity and modernise key parts of Iran’s economy if a final agreement is reached.
A senior Iranian source told Reuters that Tehran had initially sought $400 billion in compensation from Washington for damage caused during the war. However, the United States rejected that proposal, leading negotiators to explore alternative economic solutions.
How The Reconstruction Fund Would Work
The resulting proposal, known as the Reconstruction and Development Fund, emerged as a compromise mechanism intended to attract private capital rather than direct government payments.
The Iranian source said regional countries could participate in several ways, including securing loans, opening credit lines or directly financing reconstruction projects. Potential projects include repairing facilities damaged during the conflict, such as the Mobarakeh Steel complex, refineries, airports and other infrastructure.
Officials involved in the discussions view the fund as a practical pathway to rebuilding damaged assets while encouraging broader economic engagement from international investors.
Iran’s Untapped Economic Potential
Despite being one of the largest economies in the Middle East, Iran has attracted little significant foreign direct investment over the past four decades due to successive rounds of US and international sanctions that limited access to global capital markets.
The country holds the world’s second-largest proven natural gas reserves and the fourth-largest proven oil reserves, making it a potentially attractive destination for long-term energy investment.
Iran also has a population of more than 92 million people, a large educated workforce and a diversified industrial base. Analysts have long pointed to growth opportunities across sectors including petrochemicals, mining, tourism and agriculture.
Fund Linked To Peace Deal Timeline
The source familiar with the agreement stressed that the investment fund is separate from ongoing negotiations over sanctions relief and the release of Iranian sovereign assets held abroad.
According to the source, the two tracks serve different purposes and will proceed on separate timelines. The investment vehicle will only be established once a final and mutually acceptable agreement has been concluded.
The memorandum of understanding expected to be signed will serve as a framework for the next 60 days. During that period, fund administrators are expected to work with Iranian officials and investors to identify, evaluate and prepare potential projects.
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Key Details Still Under Negotiation
Several aspects of the proposed fund remain unresolved, including how it will be managed and which entities will oversee operations.
The source identified companies from South Korea, Japan, Singapore, Malaysia and the United States among those that have already made commitments. However, a complete list of participating firms was not disclosed.
Iran’s foreign ministry and Pakistan’s foreign ministry, which helped facilitate discussions surrounding the investment fund, did not immediately respond to requests for comment.
Meanwhile, a White House spokeswoman referred to comments made by Vice President JD Vance during a CBS interview on Monday. Vance said Iran could gain access to a $300 billion reconstruction fund supported by Gulf states if it complies with an agreement that includes dismantling its nuclear programme, eliminating enriched nuclear material stockpiles and accepting a strict inspection and enforcement regime.
Negotiators from both countries are expected to continue discussions over the next 60 days on issues including nuclear commitments, sanctions and regional security as they work towards a final agreement.
