• President Trump insists the U.S. will not provide funding to Iran as part of any nuclear agreement.
  • A proposed private fund, backed by Gulf states, aims to finance Iranian reconstruction subject to compliance.
  • Negotiations continue amid G7 discussions, with allies debating the balance of sanctions relief and verification.

U.S. Firm on No Direct Funding

President Trump has drawn a clear line in ongoing nuclear negotiations with Iran, declaring that the United States will not invest money in the Islamic Republic. “We won’t give them anything when it comes to money, investment,” Trump said at the G7 summit in June, reiterating his stance that any deal must focus solely on preventing Iran from obtaining a nuclear weapon without financial commitments from American taxpayers. The remark came as diplomats work to finalize a framework that could replace the defunct 2015 Joint Comprehensive Plan of Action.

Gulf-Backed Fund Emerges as Key Mechanism

According to people familiar with the matter, the proposed structure includes a private investment fund, primarily financed by Gulf states, that would channel capital into Iran’s infrastructure and energy sectors once Tehran demonstrates compliance with nuclear restrictions. Reports indicate that more than half of the targeted sum has already been pledged by regional partners, though the exact amount remains undisclosed. The fund is designed to insulate the U.S. from direct financial exposure while unlocking much-needed investment for Iran’s struggling economy. “This is about creating a credible pathway for reconstruction without putting U.S. taxpayers on the hook,” a senior administration official said, speaking on condition of anonymity.

Political and Diplomatic Balancing Act

The negotiations have stirred debate among U.S. allies and domestic critics. At the G7, European leaders pressed for a broader incentives package, while Gulf states expressed caution over Iran’s regional ambitions. “The challenge is to ensure that any financial flows are tied to verifiable, irreversible nonproliferation steps,” noted a European diplomat involved in the talks. Iran has demanded significant sanctions relief and access to international capital markets, complicating efforts to reach a consensus. Without a deal, the risk of escalation remains high, as Iran’s nuclear program continues to advance beyond agreed limits.

Implications for Investors and Markets

The evolving architecture of a potential agreement has drawn attention from private credit and infrastructure funds eyeing opportunities in Iran’s underdeveloped energy and transportation sectors. However, the uncertainty around enforcement and the potential for future snapback sanctions have tempered enthusiasm. “Any fund will need airtight compliance mechanisms and political guarantees to attract institutional capital,” said a Middle East-focused investor who declined to be named. Markets are watching for further clarity on the fund’s governance and oversight.

Correction: An earlier version of this article misstated the source of the fund as being U.S.-backed. The fund is structured as a private initiative with Gulf-state commitments.