The Trump administration has put forward a plan to invest $5 billion in a fund aimed at helping Middle Eastern countries rebuild energy infrastructure damaged during the Iran war and decrease dependence on the Strait of Hormuz for oil and gas transport, according to US and Middle Eastern officials and documents reviewed by The Wall Street Journal.
The proposal represents recognition that the seven-month conflict has disrupted the global energy market and damaged regional pipelines and refineries.
The US plan seeks matching contributions from the Middle Eastern partners. The combined funding would create a $10 billion investment fund called the Partnership for Allied Trust and Construction, or Pact.
Talks about the fund are ongoing, and the arrangement’s terms may change, US officials said. Whether other countries will participate remains uncertain.
Some Middle East officials said the initiative appears to be Washington’s effort to present the Strait of Hormuz as less important for energy transport and demonstrate unity between the US and its allies in confronting Iran. They noted that establishing a fund to rebuild damaged energy facilities without a peace agreement with Tehran could be premature, as the regime might target new infrastructure with drones and missiles.
The proposed fund would be managed by the Development Finance Corporation, a federal agency that partners with the private sector to support US national security policy. The agency’s programmes have traditionally focused on projects in developing countries.
Energy analysts and officials have estimated energy infrastructure repair costs in the region at tens of billions of dollars, covering engineering, construction, equipment and materials.
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