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Iran deal has $300 billion fund, more than half already committed, source says

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The U.S.-Iran framework agreement lays out a $300 billion private fund to encourage investment in Iran, and more than half that amount has already been pledged, a source with direct knowledge of the deal told Reuters.

The fund is designed to provide economic incentive for both parties to reach a final deal, said the source, who spoke on condition of anonymity because the idea has not yet been announced as Washington and Tehran prepare to sign on Friday.

U.S. and Iranian officials claimed on Sunday they had agreed on a framework to end their war, which began when U.S. and Israeli forces invaded Iran on 28 February, stop the U.S. blockade of Iran and reopen the Strait of Hormuz, a critical supply route for world oil and gas.

The new fund is a private investment vehicle, not a rehabilitation or reparations program and will not involve any ⁠government money or subsidies, the source added. Companies based in the U.S., the Gulf Arab states, Asia, South America and Africa have agreed to contribute funds, the source said.
The pledged investments are in energy, logistics, manufacturing and transport, the person said.

Tehran had initially asked the U.S. for $400 billion in war damages compensation, but Washington had refused to pay, a senior Iranian source told Reuters.

And then came the concept for the fund, to be called the Reconstruction and Development Fund.

The Iranian source said the structure offers for the contribution of regional countries in numerous ways. These include the provision of loans, the establishment of credit lines, and direct finance for the rehabilitation of war-damaged locations, including facilities such as the Mobarakeh Steel complex, refineries, airports, and infrastructure more broadly impacted by the conflict.

Successive waves of U.S. and international sanctions have locked Iran, one of the largest economies in the Middle East, out of global finance markets, leaving it with virtually no meaningful foreign direct investment during the previous four decades.

It possesses the second-largest proven natural gas reserves in the world and fourth-largest proven oil reserves.

It also possesses a young and educated population of over 92 million people, a varied industrial base and untapped potential in a wide range of sectors from petrochemicals and mining to tourism and agriculture.

The investment fund is independent from a simultaneous track of negotiations on eliminating U.S. sanctions and releasing Iranian sovereign assets frozen abroad,” the source said, saying the two were distinct financial mechanisms with distinct objectives and timelines.

The fund will not be established or operating unless there is an agreed final and suitable contract. The signed memorandum of understanding is designed to structure the process over the next 60 days.It will be created only once the final transaction is signed,” the source added. During these 60 days, the fund managers will work with Iranians and investors to design and scope initiatives.

Iran’s foreign ministry and Pakistan’s foreign ministry, which helped arbitrate the investment fund arrangement, did not immediately respond to demands for comment .

White House spokesperson Karine Jean-Pierre cited a Monday CBS interview with Vice President JD Vance, who said Iran could tap a $300 billion reconstruction fund backed by Gulf states if it abides by an agreement with Washington, including dismantling its nuclear programme, eliminating its stockpile of enriched material and accepting a strict inspection and enforcement regime.

The insider would not explain how the fund will be administered, or by whom, saying that critical aspects were needed to be worked out.

The source said corporations from South Korea, Japan, Singapore, Malaysia and the United States were among those who have made promises but declined to provide a full list.

The 60-day pact is a framework, not a final agreement, and U.S. and Iran negotiators are anticipated to work across numerous tracks during that time dealing with nuclear, sanctions and regional security problems.

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IHC forms larger bench to hear plea against PTI’s Sept 27 protest

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The Islamabad High Court (IHC) has issued a written decision on a petition challenging Pakistan Tehreek-e-Insaf’s (PTI) scheduled September 27 protest and long march, while creating a three-member bigger bench to consider the matter.

The larger bench will comprise IHC Chief Justice Sarfraz Dogar, Justice Azam Khan and Justice Muhammad Asif. The bench is slated to hear the case on September 10.

Chief Justice Sarfraz Dogar issued a three-page written order from the last session and directed the chief secretaries and inspectors general of police of all four provinces to come before the court in person on Thursday.

PTI finalises backup protest plan if Minar-e-Pakistan demonstration is denied permission

The court also summoned the Islamabad chief commissioner, Islamabad IG and deputy commissioner in their personal capacity. The advocate generals of all four provinces and Islamabad have also been asked to assist the court in the proceedings.

The petition was submitted by a businessman who contended that PTI’s intended demonstration could disrupt citizens and economic activity in Islamabad. His counsel informed the court that legislation governing protests in the capital already exists and highlighted concerns about the likely use of government resources during the planned mobilisation.

During the previous session, the petitioner’s lawyer also referred to PTI’s 2024 protest and brought relevant remarks and newspaper reports before the court. He suggested that protests should not be utilized to exert pressure on governmental institutions and judges.

The court remarked that the subject was of substantial importance and, in view of its sensitivity, issued a notice to the Attorney General for Pakistan for help in the case. The court then determined that the dispute should be heard by a larger bench.

The plea came after PTI organized a September 27 rally and long march towards Islamabad. The party has said the mobilisation is focused at getting access to party founder Imran Khan for his family and personal doctors, as well as raising concerns regarding his legal and prison-related affairs.

The IHC has fixed the subject for further hearing on September 10, when the summoned officials are likely to appear before the three-member bigger bench.

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Iran says it caught US underwater drone in Strait of Hormuz

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Iran’s Revolutionary Guards said on Tuesday it has captured a U.S. uncrewed submarine at the entrance to the Strait of Hormuz, offering a rare insight at how underwater drones are being ​used in military operations.

Iranian state media reported the craft was a Dive-LD, a ​large autonomous underwater vehicle made by California defense firm Anduril. The 19-foot (5.8-metre) ⁠submersible can carry out duties like mine countermeasures, seabed mapping, intelligence collection and the ​inspection of undersea infrastructure such as cables and pipelines, the business has said. “We detained one ​of the most advanced, clever and unmanned submarines of the terrorist American army near the entrance to the Strait of Hormuz. This submersible is equipped with the latest technologies,” the Revolutionary Guards Navy said ​in a statement broadcast by Iranian state media.

In response, a Pentagon spokesperson revealed a ​underwater drone had “malfunctioned more than a day ago.” “It was surveying regional seas in support of ongoing operations. ‌The ⁠defective drone was an earlier model that neither collected sensitive data nor carried any classified sonar or radar technology,” the spokesperson stated.

Anduril confirmed the loss of one of its vessels, but minimized the seriousness of the incident. “Dive-LD is an attritable autonomous system, meaning it ​is built from the ​outset to operate ⁠in perilous conditions where loss of the vehicle is a predicted possibility,” a company representative stated.

The U.S. Navy is spending extensively in ​unmanned naval systems, including undersea and surface vehicles, as it seeks ​cheaper ways ⁠to monitor broad expanses of ocean, gather intelligence and track hostile ships and submarines without putting troops at danger.

According to Anduril’s website, Dive-LD can operate for up to 10 days ⁠without returning ​to base and is meant to dive to depths ​of as much as 6,000 metres (19,700 ft). Dive-LD units cost roughly $2.5 million each, U.S. military news site DefenseScoop ​reported in 2024.

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Dollar wobbles, oil’s dash to $100 chills sentiment, Yen stands big

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The Japanese yen was pinned near its best level since February on Wednesday, leaving the dollar on the ‌defensive as traders grappled with oil prices heading toward $100 a barrel amid an expanding war in the Middle East.

Iranian-backed Houthis in Yemen attacked several Saudi cities, drawing a U.S. partner further into a battle that has dragged on for more than six months, as U.S. forces struck multiple Iranian oil tankers and Iran threatened a U.S. station in Jordan.

Brent crude futures rose by more than 1.48% to $99.37 a barrel, weighing on global markets ahead of a U.S. inflation data on Friday that will set the stage for central bank meetings next week in the U.S. and Japan.

The currency market nudged the dollar down a touch in response, though some analysts said that was due to the yen’s swift rally over the past week.

The euro held constant at $1.1631 while the pound was last bought at $1.3546. ​The dollar index, measuring the U.S. currency against a basket of six major rivals, was at 98.15, near its lowest level in nearly two weeks.

OCBC strategists said the current increase keeps Fed policy implications from higher energy prices in focus, especially after last week’s robust U.S. payrolls report reignited expectations of another rate hike. “Higher oil and rates should help limit USD fall for now but we anticipate a more dramatic move will await confirmation from the impending inflation data,” they said in a note.

The yen has been under focus after its 4% surge in September that has altered the math for the popular carry trade in which investors borrow in yen at a low cost and invest in other currencies and assets yielding better interest.

The yen was stronger at 153.65 per dollar, close to the seven-month peak of 152.89 struck on Tuesday. The surge has been broad-based with the Japanese currency strengthening against the euro and sterling as well as favorite carry-trade targets such as the Mexican peso and Turkish lira.

The increase has been fueled by expectations of quicker tightening by the Bank of Japan and the return of offshore cash by Japanese investors and pressure from Washington for a higher yen.

Traders broadly expect the BOJ to hike rates by 25 basis points at its September 17-18 meeting but the rise will rest on if Governor Kazuo Ueda delivers hawkish comments and the wild card will be the Federal Reserve.Aninda Mitra, head of Asia macro and investment strategy at BNY Investments, stated “Much will depend on how the market prices in the Fed’s path of interest rates too.We estimate the Yen’s “fair value” to be in the 140’s and a further move to that area should not be a total surprise following what has clearly been an overshoot to the side of excessive Yen weakness.”

The Australian dollar gained 0.12% to $0.7225, just below a four-month high set in the previous session, in Pacific trade. The New Zealand dollar was up 0.16% at $0.5862.

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