- The U.S. and Ukraine have signed a joint investment fund agreement that will receive 50% of royalties from Ukraine's natural resource projects rather than requiring debt repayment for U.S. aid.
- The partnership will be governed by a six-person board with equal Ukrainian and American representation to make collaborative decisions on fund resource allocation.
- The deal includes oil, gas and 55 minerals with provisions giving the U.S. first choice to acquire resources, while explicitly stating it won't interfere with Ukraine's EU membership aspirations.
After much back and forth between the two countries, the U.S. and Ukraine have reached an agreement on the long-discussed minerals deal.
The U.S. Treasury Department announced Wednesday that both countries had signed the United States-Ukraine Reconstruction Investment Fund “in recognition” of the $183 billion the U.S. has given the country since the start of the war.
Since its initial proposals, the deal has changed significantly. Early drafts framed the deal as a debt settlement for funds the U.S. had given Ukraine, but the final agreement has no mention of repayment.
Similarly, the deal initially required Ukraine to contribute 50% of all revenue earned from future monetization of all Ukrainian government-owned natural resource assets, and the signed deal focuses solely on new natural resource projects.
“This partnership allows the U.S. 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,“ the Treasury Secretary Scott Bessent said of the deal.
The deal will be finalized in the next two weeks, after Ukraine’s parliament ratifies the agreement, per The New York Times.
Deal creates a joint investment fund between the countries
A White House fact sheet released on Thursday, lays out how the deal will proceed.
The partnership establishes a fund that will “receive 50% of royalties, license fees, and other similar payments from natural resource projects in Ukraine.”
The money generated from the fund will then be invested in new projects in Ukraine that will generate long term returns for both countries. The White House adds, “Indirect benefits will include a stronger private sector and more robust, lasting infrastructure for Ukraine’s long-term success.”
These joint investments are intended to give the U.S. personal stakes in Ukraine’s sovereignty while ensuring the U.S. does not continue to send the country blank checks, The New York Times reported.
Partnership will be controlled by a board of Ukrainians and Americans
A six-person board will have a one-to-one ratio of Ukrainians and Americans, “who will work together through a collaborative process to make decisions for allocation of fund resources, such as investment and distributions.”
U.S. members of the board will likely come from the International Development Finance Corporation and the Treasury Department.
Previous versions of the deal did not specify how many Ukrainians and Americans would be included on the board, but the 3-3 ratio suggests the final deal prioritizes the two countries as having fair and equal say in the joint investment.
Oil, gas and minerals included in the deal
The White House announced that “natural resource projects” will include hydrocarbons, minerals and related infrastructure development.
“If the United States decides to acquire these resources for ourselves, we will be given first choice to either acquire them or designate the purchaser of our choice,” the press release added.
Currently, 55 minerals are included in the deal, but more can be added on if an agreement is reached, The Associated Press reported.
Deal does not hinder Ukraine from joining the EU
Talks of Ukraine joining the European Union began formally last June, and reporting on earlier drafts stated that the deal could prevent Ukraine from accession.
According to the BBC, the signed deal explicitly states it would not come in conflict with Ukraine’s intention to join the EU.
Further, it adds that if the EU requires the country to revisit the terms of the deal during the accession process to fulfill “additional obligations,” the U.S. will negotiate in good faith.
The White House added that the deal that was reached between the U.S. and Ukraine will in no way benefit Russia.
“No state, company, or person who financed or supplied the Russian war machine will be allowed to benefit from the reconstruction of Ukraine, including participation in projects supported by fund resources,” the press release stated.