Iran deal, $300 billion fund - Reuters reveals details from the Reconstruction and Development Fund
A $300 billion private fund designed to boost investment in Iran has been set out in the US-Iran framework agreement and more than half of that amount has already been pledged, a source with direct knowledge of the deal told Reuters.
The fund is designed to give both sides an economic incentive to reach a final agreement to end the war, said the source, who spoke on condition of anonymity because the plan has not yet been announced, as Washington and Tehran prepare to sign on Friday.
The existence of the fund has been reported previously, but Reuters reveals for the first time that more than half of the amount has already been pledged and that it will consist entirely of private sector funds.
US and Iranian officials said they had agreed on a framework to end their war, which began when US and Israeli forces attacked Iran on February 28, to end the US blockade of Iran and reopen the Strait of Hormuz, a key supply route for global oil and gas.
The new fund is a private investment vehicle, not a reconstruction or reparations program, and will not include any government money or grants, the source said, adding that companies based in the US, Gulf Arab states, Asia, South America and Africa have agreed to commit funding.
The promised investments include energy, logistics, manufacturing and transportation, the source said. A senior Iranian source told Reuters that Tehran had initially demanded $400 billion in compensation for war damages from the United States, but Washington had said it would not provide it. The idea for the fund, which will be called the Reconstruction and Development Fund, was then born.
The mechanism envisages regional countries contributing in various ways, the Iranian source said. These include providing loans, establishing credit lines or directly financing the reconstruction of war-damaged countries, including facilities such as the Mobarakeh steel complex, refineries, airports and, more broadly, infrastructure affected by the conflict.
Iran, one of the Middle East's largest economies, has attracted almost no significant foreign direct investment in the past four decades, blocked from global capital markets by successive waves of US and international sanctions. The country has the world's second-largest natural gas reserves and the fourth-largest oil reserves.
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