US-Ukraine Investment Fund Officially Launched to Support Reconstruction

A new American-Ukrainian Investment Fund has been officially launched as of May 23, according to Ukraine’s Ministry of Economy. The establishment of the Fund follows the signing of the U.S.-Ukraine Agreement on the Reconstruction Investment Fund on 30 April, which was ratified by Ukraine’s Parliament on 8 May.
For more details please refer to our recent release.

This announcement followed the receipt of a formal diplomatic note from Julie S. Davis, Chargé d’Affaires of the United States in Ukraine, to Ukraine’s Minister of Economy, Yuliia Svyrydenko. Prior to the launch, the Ukrainian government submitted its own note of confirmation, and Ukraine’s State Agency for Support of Public-Private Partnership signed two commercial partnership agreements with the U.S. International Development Finance Corporation (DFC).

The fund will be jointly financed by the United States and Ukraine and will support strategic investment projects in natural resources, oil and gas, seaports, and related infrastructure.

In addition to direct investment, the Fund is expected to facilitate connections between Ukrainian businesses and international investors, including the DFC. It is designed to operate without a fixed end date, although its performance will be reviewed every ten years by both partners.

Extended List of Critical Minerals and Natural Resources

Following the official launch of the American-Ukrainian Investment Fund for Reconstruction, aimed at channelling funds into strategic sectors, including natural resource development, the Cabinet of Ministers of Ukraine has expanded the list of minerals of national importance. This move aims to align the country’s resource policy with global trends and support long-term reconstruction.

Government representative Taras Melnychuk stated that the updated classification introduces several critical and emerging minerals, including natural hydrogen, tight gas (found in low-permeability rocks such as limestone and sandstone), and cesium ores – a rare and strategic component in electronics and defense technologies.

The decision also introduces new structural categories to the list, such as Non-combustibles (including gaseous subgroups) and Technogenic minerals, which are subdivided into combustible, metallic, and non-metallic materials. The expanded list reflects the evolving demand for materials essential to clean energy technologies and modern industrial applications.

Impact on Business

As previously explained, the U.S.-Ukraine Agreement on the Reconstruction Investment Fund grants the Fund two important rights:

• Investment Opportunity Right (Right of First Refusal): If there is an intention to attract capital for any project falling within the Fund's areas of interest (use of sites with specified resources or significant infrastructure projects), initiators are always obliged to inform the Fund first. If the Fund expresses interest, good faith negotiations must be conducted with it. Offering substantially more favorable terms to third parties for a similar investment opportunity is prohibited.
• Offtake Right: The Fund obtains a preferential right to purchase, on commercial terms and for the duration of the relevant license or special permit, the products extracted during the use of the aforementioned natural resources. The subsoil user will be restricted from offering significantly more favourable sales terms to third parties.

Since commercial partnership agreements have been executed and the Fund established, each special permit for subsoil use related to any assets concerning natural resources shall include in the terms of such a license or special permit, as well as in the related subsoil use terms agreement or production sharing agreement with the subsoil user: (i) a provision allowing the DFC (or its authorized representative) to negotiate, in accordance with the terms of the limited partnership agreement, the right to purchase extracted resources on market-based commercial terms during the term of such license or special permit; and (ii) a requirement for the subsoil user to refrain, for a certain period and under the terms defined in the limited partnership agreement, from offering any third party significantly more favourable terms for the purchase of extractive products that are substantially similar in quality or quantity.

It is currently difficult to assess the effect of the commercial partnership agreements and the Fund’s establishment on business operations in the minerals sector in Ukraine because the detailed mechanics of these rights granted to the Fund and DFC are described in the commercial partnership agreements, which have not been publicly disclosed. Such secrecy creates significant uncertainty for existing market players and new investors.