Uncertainty over who will pay Iran $300 billion (Getty Images)
As US secretary of state Marco Rubio heads to the Gulf to defend Washington’s proposed peace deal with Iran, one provision has emerged as a major source of concern among America’s Arab allies — a planned $300 billion reconstruction and development fund for Tehran. While critics in the US have portrayed the proposal as a massive American payout to Iran, the Trump administration insists the money would come largely from Gulf states and private investors rather than US taxpayers.The controversy stems from a draft memorandum of understanding between Washington and Tehran that envisages a reconstruction and economic development plan worth at least $300 billion for Iran. The provision has sparked criticism both in the US and across the Gulf, where several governments fear that a wealthier Iran could expand its regional influence and military capabilities. The provision quickly drew criticism from Democratic lawmakers, who argued that such a massive commitment would be difficult to justify domestically. “With $300 billion, we could end homelessness, fund cancer research for 40 years, and give every child free pre-K for over 7 years. Instead, Trump is sending it to Iran,” Senator Amy Klobuchar wrote on X. President Donald Trump, however, rejected the claim that Washington would be handing over billions of dollars to Tehran. “There is no 300 Billion Dollar payment to Iran by the US,” Trump wrote on Truth Social on June 18. “That’s Fake News! All there is for the US is Success, Lower Oil Prices, and Victory.”
Who would fund $300 billion?
While questions remain about the final structure of the fund, statements from administration officials suggest that the money is expected to come largely from foreign governments, private investors and international businesses rather than the US government. Vice President JD Vance said there was significant interest from countries in the Gulf and beyond to invest in Iran if relations improve and sanctions are eased. “There is a great desire from the Arab world and from outside the Arab world to actually get involved in Iran if they behave properly,” Politifact quoted Vance saying. He cited the United Arab Emirates as an example, saying Emirati entities could potentially invest in projects such as power plants if US sanctions no longer blocked such investments. Vance also suggested that private capital would play a significant role, though he stressed that any investments would depend on changes in Iranian behaviour and the implementation of the broader agreement.
Gulf nations may fund plan
While US officials have suggested that Gulf countries could play a key role in financing Iran’s proposed reconstruction and development fund, the prospect is generating unease among several of Washington’s Arab allies. Vice President JD Vance has cited the United Arab Emirates as an example of the kind of regional investor that could participate if sanctions are eased, arguing that countries in the Arab world are interested in investing in Iran should it alter its behaviour.However, a Reuters report said officials in several Gulf Cooperation Council (GCC) states were privately surprised by the terms of the US-Iran understanding, particularly the proposed $300 billion reconstruction fund. Some regional governments fear that a large influx of capital could strengthen Tehran’s military capabilities and expand support for allied groups across the Middle East.The report said that roughly half of the proposed fund has already been committed through a private investment vehicle involving no government grants. The investments are expected to come from companies in the US, Gulf Arab states, Asia, South America and Africa, although no participating entities have been publicly identified so far. Go to Source
