A Ukrainian official said on Wednesday that she had signed an agreement on behalf of the government that creates a US-Ukraine Reconstruction Investment Fund. The agreement aims to create an environment that promotes further economic growth for both countries.
“Together with the United States, we are creating the Fund that will attract global investment into our country,” wrote Yulia Svyrydenko, First Deputy Prime Minister of Ukraine on X.
The deal has many variables which Svyrydenko detailed in a lengthy thread of posts, here are the key provisions.
Ukraine retains full ownership
All resources in both land and sea in what’s defined as Ukrainian territory will remain under Ukrainian control and ownership. Kyiv also reserves the right to determine what and where to extract, stressing that the subsoil remains state property, a term enshrined in the deal.
Equal Partnership
The fund is to be created on a 50-50 basis and will be managed jointly by both Ukraine and the United States. Neither party is to have a majority vote, reflecting a true equal partnership based on mutual gain, cooperation and respect.
Protection of national companies
The agreement will not impose any changes in the classification of companies’ legal registrations. State-owned companies like Ukrnafta and Energoatom are to remain state-owned.
No debt
The agreement makes no mention of any Ukrainian obligations to the United States. The implementation of the agreement will allow both countries to boost their economic potential through joint cooperation.
No interference with EU integration
The agreement complies with the Constitution of Ukraine and does not change the European integration course. The document is consistent with national legislation and does not contradict any of Ukraine’s international obligations.
Kyiv is hopeful that the agreement will signal to other countries that Ukraine is a reliable global player, and highlight its intent to cooperate with partners and pursue long-term deals for decades to come.
Fund to be filled with income from new licenses
50% of funds from new licenses for projects in the field of critical materials and oil and gas, which will be transferred to the budget after the creation of the fund.
Income from projects already underway or budgeted revenues are not included in the fund.
US obligation to attract more investment for Ukraine
The agreement also obliges Washington to help attract more investment and technology for Kyiv. The fund will be directly supported by the US government through its International Development Finance Corporation (DFC).
The DFC will help bring in new investment and technology from companies and funds in both the US and EU and other countries that support Kyiv’s fight against Moscow.
Technology was underscored as an important component of the deal, as Ukraine deems it important to secure not just capital, but also innovation.
Tax guarantees
The Fund’s income and contributions will not taxed in either the US or Ukraine, so that investments yield the greatest possible results for both parties.
ADVEReadNOWISEMENTBoth countries will be equally contributing to the fund. Svyrydenko says that in addition to direct funds, Washington can choose to provide further support in the form of weapons, for instance, air defence systems.
Kyiv will also do its part and reciprocate beyond the agreed upon 50% from revenues generated from new rents and licenses, if it deems necessary.
The joint fund will then invest the capital in mineral and natural resource projects, as well as other related infrastructure. The specific investment projects tare to be decided on jointly by Ukraine and the US. The deal however stipulates that such investments are to be made exclusively in Ukraine.
US Treasury Secretary Scott Bessent said in a video posted to X that “this partnership allows the United States to invest alongside Ukraine, to unlock Ukraine’s growth assets, mobilize American talent, capital and governance standards that will improve Ukraine’s investment climate and accelerate Ukraine’s economic recovery.”
ADVEReadNOWISEMENTBoth countries say the agreement is designed to be a long term joint investment, planned to last for decades.
Additional sources • AP