A proposed $300 billion private investment fund aimed at boosting investment in Iran has been included in the US-Iran framework agreement, with more than half of the planned financing already committed by international investors, according to a source familiar with the negotiations.
The source said the fund is intended to provide both Washington and Tehran with a strong economic incentive to conclude a final agreement after the two sides reached a framework aimed at ending hostilities and restoring regional stability.
US and Iranian officials announced on Sunday that they had agreed on a framework to end the conflict that began on February 28, halt the US blockade of Iran and reopen the Strait of Hormuz, a vital shipping route for global oil and gas supplies.
According to the source, the proposed Reconstruction and Development Fund will be financed entirely through private investment and will not include government funding, grants or reparations. Companies from the United States, Gulf countries, Asia, South America and Africa have already pledged investments in sectors including energy, logistics, manufacturing and transportation.
A senior Iranian source said Tehran had initially sought $400 billion in compensation for war-related damage, but Washington rejected the proposal. Negotiators subsequently developed the concept of a private investment fund as an alternative mechanism to support Iran’s economic recovery.
Under the proposal, regional countries could contribute by providing loans, establishing credit facilities or directly financing the reconstruction of infrastructure damaged during the conflict, including industrial facilities, refineries, airports and other key public assets.
Iran, which possesses the world’s second-largest proven natural gas reserves and fourth-largest oil reserves, has received limited foreign direct investment over the past four decades due to international sanctions despite its large domestic market and diversified industrial base.
The source said the investment fund is separate from parallel negotiations covering sanctions relief and the release of Iranian sovereign assets frozen abroad, describing them as independent financial mechanisms with different objectives and timelines.
The fund will only become operational after a final agreement is concluded. The memorandum of understanding, expected to be signed on Friday, is designed to provide a 60-day framework during which officials and investors will identify and develop priority investment projects.
A White House spokesperson referred to comments by Vice President JD Vance, who said Iran could gain access to a $300 billion reconstruction fund backed by Gulf states if it complies with the agreement, including dismantling its nuclear programme, eliminating its stockpile of enriched material and accepting a strict inspection regime.
The source declined to identify the future administrators of the fund, saying discussions on governance arrangements were still ongoing. However, companies from South Korea, Japan, Singapore, Malaysia and the United States were among those that had already committed financing.
The proposed memorandum is intended to serve as a framework rather than a final settlement, with US and Iranian negotiators expected to continue discussions on nuclear issues, sanctions and regional security during the 60-day implementation period.