US President Trump and Iranian President Pezeshkian signed a memorandum of understanding overnight Wednesday outlining a framework to end the war that began on February 28, 2026, between US-Israeli forces and Iran [1, 2, 3]. The agreement included lifting the US naval blockade on Iranian ports and an Iranian pledge to reopen the Strait of Hormuz toll-free for 60 days [3].
A key element of the deal is a $300 billion private investment fund named the Reconstruction and Development Fund aimed at stimulating investment in Iran's war-damaged sectors including energy, logistics, manufacturing, and transport [1, 2]. More than half of this fund has already been committed by companies across the US, Gulf Arab states, Asia, South America, and Africa [1, 2]. The fund is exclusively private, containing no government money or grants [1, 2]. Regional countries are to contribute via loans, credit lines, or direct financing to reconstruction projects such as infrastructure, refineries, airports, and the Mobarakeh Steel complex [1, 2].
Iran initially sought $400 billion from the US as war damage compensation but Washington refused, leading to the creation of the fund concept as an alternative [1, 2]. The investment mechanism operates separately from ongoing talks focused on lifting US sanctions and releasing frozen Iranian assets [1, 2]. The US Treasury Department has already committed to issuing waivers on Iranian oil exports and to lifting sanctions fully in the final agreement [3].
Iran, with over 92 million people, holds the world's second-largest proven natural gas reserves and fourth-largest proven oil reserves, alongside a largely untapped industrial base [1, 2]. This fund targets capitalizing on those economic strengths post-conflict.
The $300 billion fund and overall deal have drawn mixed reactions in the US. Conservative figures including Sen. Ted Cruz called it an "incredibly foolish idea" and "utterly indefensible" to allow Iranian access to such funds [4]. Former Vice President Mike Pence described the deal as "much bigger than a mistake," criticizing immediate US concessions like sanctions waivers [4]. Steve Bannon demanded the fund be rerouted first to the US to compensate for war costs [4]. In contrast, some Republican senators showed qualified support. Sen. Lindsey Graham called it "beneficial" if hostilities end and the Strait reopens, seeing "little downside to trying" [3]. Sen. Ron Johnson noted the deal "recognizes reality," while Sen. Josh Hawley preferred the agreement over ground troop deployments [3].
The memorandum leaves key issues such as Iran's nuclear program to be negotiated over the next 60 days [3]. The immediate next step includes monitoring Iran's reopening of the Strait of Hormuz and ongoing discussions toward lifting sanctions and finalizing asset releases [3].
