June 17, Kathmandu – A formal peace agreement aimed at ending the ongoing conflict between the United States and Iran is scheduled to be signed this Friday. In connection with this, a proposal has been made to establish a large private fund worth $300 billion to channel economic investments into Iran, which has been included in the preliminary agreement between the two countries. According to Reuters, citing sources, this fund is intended to serve as an economic incentive to bring both parties to a final peace agreement. Due to the sensitive nature of the formal signing slated for Friday, detailed plans regarding the fund have been kept confidential for now.
Over half of the proposed amount has already secured investment commitments. According to sources, the fund will not consist of government grants or war reparations but will be entirely a private investment mechanism. Private companies from South Korea, Japan, Singapore, Malaysia, and the United States have pledged to invest in this fund. Investments will focus on Iran’s infrastructure sectors, including energy, transportation, manufacturing, steel industry, oil refining centers, and airports. The conflict began on February 28 after a joint attack on Iran by the US and Israel.
However, last Sunday, officials from the US and Iran reached an agreement to end the war. Under the terms, the US will lift the blockade on Iran, and the strategic maritime route for global energy supply, the Strait of Hormuz, will be reopened. Iran had demanded $400 billion in reparations from the US for war damages, but Washington refused to provide such government funds; hence, the private fund concept emerged as a moderate alternative.
This mechanism, named the ‘Reconstruction and Development Fund,’ will receive contributions from regional countries through loan guarantees, credit facilities, or direct investments. Despite being a major economy in the Middle East, Iran has not attracted significant foreign investment over the past four decades due to US and international sanctions. Hosting the world’s second-largest natural gas reserves and the fourth-largest proven oil deposits, Iran also has an educated youth population exceeding 92 million, which is expected to drive significant economic transformation through this investment.
According to the White House, Iran will have to meet strict conditions to qualify for the fund. Citing US Vice President J.D. Vance, a spokesperson stated that Iran must completely shut down its nuclear program, eliminate its stockpiles of highly enriched nuclear material, and accept rigorous international inspections.
The Memorandum of Understanding (MoU) scheduled for signing this Friday between the US and Iran is a 60-day preliminary framework rather than a final agreement. During this period, both countries will conduct parallel negotiations on nuclear programs, sanctions, and regional security issues. Over the next 60 days, fund administrators will work with Iranian counterparts and investors to define project plans and operational areas. The fund will be fully implemented only after the signing of the final agreement.
