US–Iran Reconstruction Fund Plan

A framework agreement between the United States and Iran includes plans to establish a private investment fund worth $30 trillion, aimed at encouraging investment in Tehran. A source directly familiar with the agreement confirmed the details to Reuters. According to the source, more than half of the fund’s targeted capital has already been pledged.

The source stated that the primary purpose of the fund is to provide economic incentives for both parties to reach a lasting agreement. The plan has not yet been formally announced, as United States and Iran are preparing to sign the agreement on Friday.

The framework follows heightened tensions after 28 February 2024, when military escalation involving Israel reportedly contributed to the outbreak of conflict. According to officials cited in the report, both sides later agreed on a framework to end hostilities. The arrangement includes provisions for lifting restrictions on Iranian ports and reopening the Strait of Hormuz, a critical global energy shipping route.

The proposed fund is not part of any state compensation or reconstruction programme. It is described as a fully private investment vehicle with no government grants. Companies from the United States, Gulf Arab states, Asia, South America, and Africa have reportedly committed financing.

A senior Iranian source told Reuters that Iran initially sought $40 trillion in compensation from the United States for wartime losses. However, Washington rejected the request, stating it would not provide war reparations. This led to the proposal of a “Reconstruction and Development Fund”.

Key Structure of the Fund

According to Iranian sources, regional countries may contribute through various mechanisms, including credit guarantees, financing arrangements, or direct investment in rebuilding infrastructure damaged by conflict. Affected facilities include the Mobarakeh Steel Company plant, oil refineries, airports, and other infrastructure assets.

Despite being one of the largest economies in the Middle East, Iran has seen limited foreign direct investment over the past four decades due to sustained sanctions imposed by the United States and the broader international community. These restrictions have significantly isolated Iran from global capital markets.

Iran holds the world’s second-largest natural gas reserves and the fourth-largest proven oil reserves. It also has a population of over 92 million, with a substantial proportion of young and educated citizens. The country has notable potential in petrochemicals, mining, tourism, and agriculture.

The investment fund is reported to be separate from parallel discussions on lifting sanctions and unfreezing Iranian state assets abroad. It is described as a distinct financial mechanism with different objectives and timelines.

According to the source, the fund will not be established or activated unless a final and satisfactory agreement is reached. The source further stated: “It will only be established after the final agreement is signed. Within 60 days, fund administrators will work with Iranian representatives and investors to define project plans and scope.”

Iran’s Foreign Ministry and Pakistan’s Foreign Ministry have reportedly been involved in mediating aspects of the agreement. However, both have declined to comment, according to Reuters.

A White House spokesperson, citing remarks by JD Vance in an interview with CBS, said Iran could gain access to the $30 trillion reconstruction fund if it complies with the terms of the agreement. These include ending its nuclear programme, dismantling enriched uranium stockpiles, and agreeing to strict inspection and enforcement mechanisms.

The fund’s governance structure has not yet been finalised. Companies from South Korea, Japan, Singapore, Malaysia, and the United States have reportedly pledged participation, although a full list has not been disclosed.

The 60-day memorandum is described as a framework rather than a final agreement. During this period, negotiators from the United States and Iran are expected to work on issues including nuclear activity, sanctions, and regional security.