Iran deal includes $300 billion fund

Commitments exceed $150 billion across five regions, says source

DUBAI:

A $300 billion private fund designed to trigger investment into Iran is outlined in the U.S.-Iran framework agreement and more than half that sum has already been committed, a source with direct knowledge of the deal told Reuters.

The fund is designed to give both sides an economic incentive to conclude a final deal, 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.

US and Iranian officials said on Sunday they had agreed on a framework to end their war, which began when U.S. and Israeli forces attacked Iran on February 28, halt the U.S. 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 U.S., the Gulf Arab states, Asia, South America and Africa have agreed to commit financing.

Investments pledged span energy, logistics, manufacturing and transport, the source said.

A senior Iranian source told Reuters that Tehran had originally sought $400 billion as compensation for war damages from the US but Washington had said it would not provide it.

The idea for the fund, which is to be named the Reconstruction and Development Fund, had then emerged.

The mechanism envisages regional countries contributing in various ways, the Iranian source said. These include securing loans, establishing credit lines or directly financing the reconstruction of sites damaged in the war, including facilities such as the Mobarakeh Steel complex, refineries, airports and, more broadly, infrastructure affected by the conflict.