By Andrew Mills, Maha Al-Dahan and Parisa Hafezi

DUBAI, June 16 (Reuters) - A source familiar with the matter told Reuters about a $300 billion special fund aimed at stimulating investment in Iran, noting that more than half of this amount has already been allocated.

The source, who asked not to be identified because the plan has not yet been announced, explained that the fund aims to give both parties an economic incentive to reach a final agreement.

US and Iranian officials announced on Sunday that they had agreed on a framework to end the war, lift the US embargo on Iran, and reopen the Strait of Hormuz, a vital waterway for global oil and gas supplies. The war began with a US and Israeli attack on Iran on February 28. The two sides will sign the framework agreement in Geneva next Friday.

The source explained that the new fund is a private investment mechanism, not a reconstruction or compensation program, and will not include any government funds or grants, adding that companies based in the United States, Arab Gulf states, Asia, South America and Africa have agreed to provide the financing.
The source indicated that the pledged investments include the energy, logistics, manufacturing and transportation sectors.