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A proposed $300 billion private investment fund aimed at reviving Iran’s economy has emerged as a key element of the framework agreement between the US and Iran to end months of conflict, Reuters reported, even as US President Donald Trump said that no American government money would be committed to the initiative.
The fund, reportedly named the Reconstruction and Development Fund, is designed to attract private-sector investment into Iran and provide an economic incentive for both sides to finalise a broader agreement expected to be negotiated over the next 60 days. More than half of the proposed financing has already been committed by companies from the United States, Gulf countries, Asia, South America and Africa, the report said.
According to the report, the investment vehicle would focus on sectors including energy, logistics, manufacturing and transport, and would be financed entirely by private investors rather than governments.
Speaking on the sidelines of the G7 summit in France, Trump rejected reports suggesting Washington would finance reconstruction efforts in Iran.
“We are not investing any money in Iran,” Trump told reporters. “That rumor got out there yesterday was ridiculous.”
The comments came after reports that the peace framework could provide Iran access to a $300 billion investment mechanism if it complies with a future agreement covering its nuclear programme and regional security commitments. US Vice President JD Vance has indicated that any such fund would be backed by private and regional investors rather than American taxpayers and would be contingent on Iran meeting strict conditions.
Economic incentive for a final agreement
The proposed fund is separate from negotiations over sanctions relief and the release of Iranian assets frozen abroad, according to the report. It would not become operational until a final agreement is signed. During the 60-day negotiation period outlined in the memorandum of understanding, fund administrators and Iranian officials are expected to identify and develop investment projects.
Iran had initially sought around $400 billion in compensation for damage caused during the conflict, but Washington reportedly rejected the idea. The investment fund subsequently emerged as an alternative mechanism to channel capital into reconstruction and economic development projects.
The initiative could mark a significant shift for Iran, which has struggled to attract substantial foreign direct investment for decades because of sanctions and restricted access to international capital markets. The country holds some of the world’s largest oil and natural gas reserves and has long been viewed by investors as a potentially lucrative but politically risky market.
Part of wider peace framework
The broader US-Iran framework agreement is intended to end hostilities that followed the conflict launched after US and Israeli strikes on Iran earlier this year. The memorandum is expected to pave the way for negotiations on Iran’s nuclear programme, sanctions relief and regional security issues. The framework also envisages reopening the Strait of Hormuz and restoring freedom of navigation through one of the world’s most important energy corridors.
According to reports, Iran’s access to the proposed investment fund would ultimately depend on compliance with any final agreement, including commitments related to its nuclear activities and international inspections.
