Investments under U.S. control: how the new mineral resources fund in Ukraine will operate

Ukraine has received from the United States a draft agreement concerning the management of natural resources and investments in their development.

The document, as confirmed by First Deputy Prime Minister and Minister of Economy Yulia Svyrydenko, contains detailed terms for the creation of an investment fund, mechanisms for mineral extraction, and the distribution of profits between the parties. However, as noted by MP Oleksiy Honcharenko, the agreement was developed without Ukraine’s participation, and now the country cannot unilaterally exit or modify its terms.

The official title of the document is “Agreement on Establishing the U.S.-Ukraine Partnership for Reconstruction Investment.” It is structured as a limited liability partnership and registered in the U.S. state of Delaware. The agreement provides for the creation of a joint investment fund called the U.S.-Ukraine Reconstruction oHA. It will be financed from two sources: on the U.S. side — from material and financial aid provided since the start of the full-scale war; on the Ukrainian side — from revenues generated by the exploitation of natural resources. These funds are to be transferred abroad in U.S. dollars and held in foreign banks, bypassing Ukraine’s national budget.

Control of the fund will be concentrated in the hands of the U.S. The general partner will be appointed solely by the American side. The management board will consist of five members: three from the U.S. and two from Ukraine. Despite this nominal representation, no decision can be made without the consent of the U.S. side, effectively stripping Ukraine of any real influence over the process.

The agreement applies to all natural resources extracted in the country, regardless of ownership form. This includes oil, gas, liquefied natural gas, minerals, and other valuable deposits. Ukraine is obliged to provide the U.S. side with complete information on all extraction projects and to offer all new initiatives to the fund first. The U.S. receives priority rights to purchase resources and enjoys special conditions in licensing. Additionally, it is prohibited to sell resources to countries the U.S. considers strategic competitors.

If the fund declines a specific project, Ukraine may work with third parties, but only under the condition that these partners do not receive more favorable terms within one year than those offered to the American side. The fund does not engage in direct commodity trading but may manage assets, including directly transferring them or resources to partners.

All financial flows will be in U.S. dollars, and any revenues from extraction — including rent, taxes, and licensing fees — will be directed to the fund directly, bypassing the state budget. While the resources remain in Ukraine, the rights to income from their extraction are effectively transferred.

Several methods for utilizing the fund’s resources are outlined: returning them to Ukraine for approved projects, partial distribution between the parties (with a mandatory return of U.S. contributions plus 4% annual interest), transfer of resources in kind, or free distribution of profits. However, all spending decisions require U.S. approval, and the U.S. retains the right to withdraw profits from Ukraine without restrictions.

Particular attention in the document is given to so-called infrastructure investment projects. While specific assets, such as ports, are not directly mentioned, their modernization may fall within the fund’s area of interest. Ukraine is required to provide information on all such projects, and the fund has priority rights to participate.

At the same time, the U.S. is not obligated to contribute additional funds to the fund. The contribution is considered to be the assistance already provided since the invasion, as well as potential participation from private American businesses — although this remains voluntary. The fund will be overseen by the U.S. International Development Finance Corporation (DFC), which also appoints the majority of the board and holds key powers.

The agreement is indefinite and cannot be terminated by Ukraine without U.S. consent. The only grounds for termination are a court decision, force majeure (such as bankruptcy), or a voluntary U.S. withdrawal. The agreement also stipulates that countries hostile to Ukraine cannot benefit from reconstruction projects.

Despite the language of partnership, the document contains no security guarantees or obligations for defense support. In essence, the agreement gives the U.S. full control over an investment fund financed by Ukrainian resources and provides Ukraine with no effective tools to protect its own interests.