On the 30th of April 2025, the United States and Ukraine signed the bilateral intergovernmental Agreement on the establishment of the United States-Ukraine Reconstruction Investment Fund. U.S. Secretary of the Treasury Scott Bessent characterized the Agreement as “historic economic partnership”, which shows “both sides’ commitment to lasting peace and prosperity in Ukraine”.
The Agreement provides a framework for the partnership, to be further detailed and implemented in a number of subsequent agreements, which together will become a major impetus for U.S.-Ukrainian bilateral economic relations, and for the development of Ukraine’s natural resources and infrastructure. At the same time, the Agreement is equally important for the US economy, ensuring the global supply chain diversification and access to the new sources of supply and processing of strategically important critical minerals.
Although at this stage the Agreement does not specify the role of the private sector, its objectives include “increasing investments” and “long-term reconstruction and modernization of Ukraine”. We hope that the subsequent agreements will provide a solid basis and mechanisms for the private sector participation and will ensure the practical enabling environment and support the private sector will need from both Governments to invest and implement specific projects.
USUBC welcomes an opportunity for our members to participate in the recovery, natural resources and infrastructure development of Ukraine within the framework of the Agreement. The establishment of the Investment Fund has the potential to create significant opportunities for the USUBC members not only in the natural resources sector, but in many other key sectors of economy, including infrastructure development, engineering, construction, logistics, insurance, demining, financial services, security and many others.
We are closely following the developments and are organizing a series of webinars to discuss the Agreement and its potential long-term multiplier effect for the private sector’s investments in Ukraine. At this time, we are pleased to offer you our short analysis of the key substantive points of the Agreement
- The Agreement provides a framework for the establishment of the “United States-Ukraine Reconstruction Investment Fund” (“Investment Fund”) and a Limited Partnership (“LP” or “Partnership”) to manage it. The Agreement is subject to ratification by the Ukrainian Parliament.
- The Agreement designates The U.S. International Development Finance Corporation (DFC) as the key decision maker and “the U.S. Partner” in LP on the U.S. side. On Ukrainian side it designates Ukrainian state “Agency on Support Public-Private Partnership” as the “Ukraine Partner”.
- The Agreement provides no details on how the Investment Fund and LP will be managed, which will be negotiated later in the “LP Agreement” to be signed by the U.S. Partner and Ukraine Partner.
- The Agreement is applicable to a broad spectrum of natural resources; it provides the list of 57 items that includes mostly critical minerals, uranium, as well as hydrocarbons – oil and gas, including LNG (other items may be agreed by the Parties in the future).
- The term of the Agreement is unlimited.
- The Agreement includes a legal stabilization clause and will take precedence over future changes in Ukrainian law.
- There will be no Ukrainian taxes, fees or duties applicable to income of the Partnership.
- No US Tariffs will be applicable to offtake rights.
- Ukraine must ensure its currency convertibility to USD (with some exceptions subject to mutual agreement).
- It is not clear how, in which proportion and in what amounts the contributions of the Parties will be made to the LP. The Agreement does provide that:
- Ukraine’s contribution to the LP is the irrevocable right to receive “the Ukraine Agreed Revenue”, whereas “Ukraine Agreed Revenue” means 50% of Ukraine’s revenues from all new and renewed subsoil licenses issued as of the Effective Date of [future] LP Agreement, but also from subsoil licenses that were issued prior, but were not industrially exploited.
- The Agreement mentions as a U.S. contribution the “new military assistance” (if it will be provided, but no evaluation mechanism is stipulated).
- When LP expresses formal interest in a new project – such project, in effect, needs to be submitted to LP for negotiations (which is a differently worded “Right of First Offer”). If LP declines, no conditions more favorable to third parties than to the LP are allowed. Details will be provided in the LP Agreement, but subject to applicable law and “Ukraine EU Obligations”.
- U.S. Partner has the right for offtake production on commercial terms from any subsoil user, which acquired subsoil rights under any available mechanism (subsoil licenses, Production Sharing Agreements, etc.), and Ukrainian side must ensure the above offtake right when granting subsoil rights through all applicable mechanisms. If the U.S. Partner declines, subsoil user cannot offer more favorable offtake terms to third parties.