The proposed $300 billion fund being discussed as part of the US-Iran interim peace agreement is intended to serve as a private investment vehicle to help drive economic development and reconstruction in Iran, according to a Reuters report.

More than half of the proposed funding has already been pledged, Reuters said, citing a source with direct knowledge of the negotiations.

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

The new fund is a private investment vehicle, not a reconstruction or reparations programme and will not include any ⁠government money or grants, the source said, adding that companies based in the US, 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.

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, the report said.