Arabian Post Staff -Dubai
The vehicle, described by a person with direct knowledge as the Reconstruction and Development Fund, is intended to create a commercial incentive for both sides to move from a preliminary memorandum of understanding to a final settlement after nearly four months of conflict. Commitments exceed $150 billion and are expected from private-sector groups across the US, Gulf Arab states, Asia, South America and Africa.
The plan is not designed as a government reparations package or a grant programme, a distinction being stressed by Washington as critics question whether the framework rewards Tehran before the hardest disputes are resolved. The fund would not include public money and would not become operational until a final deal is concluded. During the 60-day negotiating window, administrators are expected to work with Iranian counterparts and investors to define projects, governance rules and financing structures.
The fund is separate from parallel discussions on sanctions relief and access to Iranian sovereign assets frozen abroad. Those tracks carry different timelines and conditions, with US officials linking any financial benefits to Iranian cooperation on nuclear restrictions, inspections and regional security commitments. Vice-President JD Vance has argued that Tehran would gain access to economic opportunities only if it honours its obligations, including limits on nuclear activity and acceptance of a stringent verification regime.
The framework follows weeks of negotiations aimed at halting a conflict that began with US-Israeli strikes on Iran on February 28 and subsequently disrupted energy markets, shipping routes and regional security calculations. Senior US officials said a memorandum had been signed by President Donald Trump, Vance and Iran’s parliament speaker Mohammad Bagher Qalibaf, with a public ceremony scheduled in Switzerland on June 19. The pact is meant to reopen the Strait of Hormuz and restore shipping through one of the world’s most important oil and gas corridors.
Iran had initially sought $400 billion in compensation for war damage, a demand Washington rejected. The private investment mechanism emerged as an alternative that could channel capital into infrastructure and industrial recovery without direct US government funding. Potential areas include energy, logistics, manufacturing, transport, refineries, airports and damaged industrial sites such as the Mobarakeh Steel complex.
The proposal also reflects Iran’s difficulty in attracting foreign capital. Despite having the world’s second-largest proven natural gas reserves and fourth-largest proven oil reserves, the country has been largely cut off from global capital markets by sanctions. Its population of more than 92 million, industrial base and opportunities in mining, petrochemicals, tourism and agriculture make it commercially attractive, but legal risk and political uncertainty have kept major banks and multinationals away.
That caution is likely to persist. International lenders remain wary of sanctions penalties, and companies considering projects in Iran will want clarity on currency convertibility, dispute resolution, insurance, procurement rules and the durability of any US waiver. A policy reversal in Washington or Tehran could leave investors exposed to stranded assets or blocked payments.
Gulf involvement is another delicate element. Regional states have an interest in easing tensions, restoring Hormuz traffic and preventing another shock to oil and gas flows, but several capitals are also concerned about Iran’s regional networks and missile capabilities. Qatar has avoided confirming participation in the fund, while other Gulf governments have been cautious about any role that could be portrayed as underwriting Tehran’s recovery without firm guarantees.
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