US-Iran framework includes $300b private investment fund

WEB DESK: A $300b private investment fund designed to spur economic activity in Iran forms a key part of the framework agreement between Washington and Tehran, according to a source with direct knowledge of the deal.

The fund, which will comprise entirely private-sector financing, aims to provide economic incentives for both sides to reach a final agreement ending the conflict that erupted on February 28 when US and Israeli forces struck Iran.

More than half of the pledged amount has already been committed by companies from the United States, Gulf Arab states, Asia, South America, and Africa, the source told Reuters on condition of anonymity.

Reconstruction without direct reparations

The initiative, to be known as the Reconstruction and Development Fund, emerged after Iran initially sought $400b in war compensation, which Washington rejected.

It will focus on sectors such as energy, logistics, manufacturing, and transport, with investments potentially supporting damaged infrastructure including the Mobarakeh Steel complex, refineries, and airports.

Iranian officials indicated that regional countries would contribute through loans, credit lines, or direct financing.

The fund remains separate from parallel talks on lifting US sanctions and releasing frozen Iranian assets. It will not become operational until a final deal is concluded, with the memorandum of understanding (MoU) signed on Friday in Switzerland structuring negotiations over the next 60 days.

Ceasefire extension amid regional tensions

The framework extends a tenuous ceasefire announced in April, allowing Iran to resume oil sales immediately while reopening the Strait of Hormuz to maritime traffic.

US President Donald Trump described the agreement as establishing a clear barrier to Iranian nuclear weapons development, though key issues including Tehran’s missile programme and support for regional militias remain unresolved.

Meanwhile, Israel has signalled it may maintain a prolonged military presence in southern Lebanon despite the US-Iran understanding, which includes provisions for de-escalation across fronts.

Israeli media reported the army’s readiness for extended operations, even as Lebanese and Iranian officials emphasised the need for Israeli withdrawal.

The war has caused significant casualties, primarily in Iran and Lebanon, and disrupted global energy markets. Oil prices fell sharply following news of the deal.

Pakistani officials, who helped mediate aspects of the investment fund, have not commented publicly.

Both sides are expected to address nuclear concerns, sanctions relief, and regional security during the 60-day period.