The first and most crucial point repeatedly emphasised by Minister of Economy Yuliya Svyrydenko was that the agreement with the United States is not centred on minerals – it concerns broader economic cooperation between the two nations.
“I think this is what critically distinguishes this agreement from all previous iterations and initiatives of our partners. It is about creating an investment fund,” the minister stated.
Ukraine will contribute to the fund with payments equivalent to 50% of new licences, fees, and production sharing agreements [in the fields of critical raw materials, oil and gas]. The fund itself will neither engage in production activities nor participate in acquiring licences or signing production sharing agreements, according to the Deputy Prime Minister.
“The fund’s task is to invest. There have been a lot of manipulations around this topic, suggesting that the fund will now engage in geological exploration or extract and enrich uranium. It will not do this directly. It will finance projects that are potentially promising,” Svyrydenko said.
Beyond financial investment, this form of cooperation provides access to technologies and markets essential to the mining sector.
Investments will be made exclusively in projects located within Ukraine. Moreover, on a technical level, discussions with American partners have established that only companies operating within Ukraine will be involved in development, exploration, research, processing, and related activities.
The agreement does not entail the transfer of minerals, state-owned enterprises, or licences to foreign partners.
“I have been repeating this like a mantra for the past two weeks. Subsoil belongs to the people of Ukraine under the Constitution, and there have been no violations – nor can there be. This agreement is solely about creating opportunities for investment in the country.”
In 2022, Ukraine’s GDP declined by nearly 30%. Although there has since been economic growth, it is considered restorative. Accelerated growth is necessary, and for that, both human capital and investment are essential.
“Let us be realistic: there is no queue of investors competing for our oil, gas, or CRM (critical raw materials – Ed.) projects. Therefore, this initiative – the creation of a joint investment fund – represents an opportunity for us. Whether we seize it will depend on how efficiently the fund operates and how well both parties perform their roles,” explained Yuliya Svyrydenko.
The agreement to establish the recovery fund is not a security arrangement. Nonetheless, the minister underlined that, in the American perspective, economic interest “goes hand in hand with security.”
“We have a pragmatic partner. When this partner invests in Ukraine’s economy, it will have even greater motivation to support and protect our country.”
“It is certainly not a substitute for security guarantees, nor a replacement for other agreements. This document is one component of the broader security architecture that Ukraine must establish,” added the Cabinet official.
Furthermore, the United States may contribute to the fund not only through financial means but also via military assistance. This is significant to ensure the continuity of arms supplies as the war continues.
“This does not imply that all military aid will be channelled through the fund, but it is a possibility. In that case, such weapons would be appraised, and the assessment would influence the profit distribution scheduled to occur in 10 years. Such a contribution would be assigned a Class A share, and consequently, during income distribution, Class A shareholders would receive their share first,” Svyrydenko explained.
The agreement is open-ended, but it stipulates that every ten years the parties will review whether it is appropriate for the fund to continue operating. Both the Ukrainian and American sides insisted on this clause, given that certain investment projects – including geological exploration – will require long-term implementation.
The Verkhovna Rada ratified the agreement on 8 May. Additionally, on 13 May, the US International Development Finance Corporation (DFC) and the Public-Private Partnership Agency of Ukraine signed two more commercial agreements. According to the Deputy Prime Minister, these are technical implementation agreements which define the mechanisms of governance, outline the committees to be formed, and establish procedures for voting.
“They cannot, will not, and do not go beyond the basic intergovernmental agreement that I signed in Washington and which has been ratified. There were many myths circulating that these were secret annexes. But these are purely commercial agreements, and work on them had begun before the signing,” Svyrydenko stated.
According to her, the Ukrainian government has already sent a diplomatic note to the United States. “On 23 May, we are expecting a response from the United States. From that moment, the fund will become legally operational.”
“Then the organisational matters will begin: the appointment of representatives from the United States and Ukraine – three individuals from each side – who will be directly involved in managing the fund. We will address the issue of contributions, as well as the selection of legal and investment advisers who will help formulate investment policy,” the Minister said.
Several regulatory decisions are required to enable the fund to operate fully. However, the American side is prepared to move swiftly to the next stage – formulating an investment policy and identifying priority areas for investment, Svyrydenko added.
The first tranche of funding to launch the initiative will come from the United States by the end of September. These funds will be primarily used to hire investment advisers and to commence the fund’s operations.
“I believe this is the right step. And of course, one may always search for hidden threats. But in this case, we must focus on the potential benefits the fund can bring to the country – if used properly,” the Minister of Economy emphasised.
It is premature to assess the economic impact of the fund’s operations, the official noted. The outcome will depend primarily on American contributions, whether through direct financing from the DFC or via third-party involvement. However, the current list of investment projects remains at the development stage. According to Svyrydenko, all of these projects will definitely require additional geological exploration, as the most recent surveys date back to the 1980s. Ultimately, profitability will hinge on Ukraine’s readiness to propose viable projects and the willingness of the American side to provide further contributions.
The fund’s activities will be audited annually by the Audit Service. In addition, the Minister of Economy reminded the audience that parliamentary oversight remains in effect. The fund will also submit an annual report.
“In general, this fund should not be regarded as a magic wand to solve all our problems. It is simply one tool for attracting investment. That is how it should be understood,” Svyrydenko concluded.