US-Ukraine Reconstruction Investment Fund

On 30 April 2025, the First Vice Prime Minister of Ukraine and the U.S. Secretary of the Treasury signed the Agreement between the Government of Ukraine and the Government of the United States of America on the Establishment of a United States-Ukraine Reconstruction Investment Fund (hereinafter –the “Intergovernmental Agreement” and the “Fund”), which sets forth, inter alia, the parties’ commitment to a strategic partnership and general provisions to facilitate the Fund’s operations.

The Fund will be established in the form of a limited partnership and will operate under a Limited Partnership Agreement to be entered into between the United States International Development Finance Corporation (DFC) in behalf of the United States (hereinafter – the “U.S. Partner”) and the State Organization “Agency on Support Public-Private Partnership” in behalf of Ukraine (hereinafter – the “Ukraine Partner”).

This Intergovernmental Agreement is only the first of a series of agreements that will be developed in the future regarding the extraction of mineral resources in Ukraine. In particular, the second agreement, the Limited Partnership Agreement, is still being developed.

Financial Provisions and Contributions

At the same time, the Intergovernmental Agreement also contains general provisions on:

tariffs and taxation of income from the Fund’s activities;
currency conversion and cross-border transfers;
contributions of the parties to the Fund;
the Fund’s rights to receive investment information;
market rights of the US Partner to the priority right to purchase extracted minerals;
a list of minerals, the income from licences and special permits for the extraction of which will be partially transferred to the Fund.

Thus, the governments of Ukraine and the United States guarantee that the income from the Fund’s activities will not be subject to taxation, levies or other governmental charges. The government of the United States has also indicated that it does not plan to impose tariffs on any items obtained pursuant to the market rights to purchase extracted minerals.

The government of Ukraine, in turn, also guarantees the free conversion of the hryvnia into dollars and unconditional transfers of funds to the accounts of the Fund in Ukraine or abroad without payment, delay or restriction, including:

payments to the Fund related to the Fund’s income, profits and other payments;
any distribution payments;
any fees and expenses to or from the General Partner.

In addition, if necessary, the government of Ukraine may impose temporary restrictions on the conversion of hryvnia into dollars to protect macroeconomic stability in consultation with the U.S. Department of Treasury, providing notice of the timeframe for their cancellation. If fees, conditions or delays are imposed on such transactions, the government of Ukraine will reimburse the Fund for the relevant losses.

During martial law and for three months after its cancellation or termination, transfers and conversions will be made in accordance with the terms of the Limited Partnership Agreement. The place of opening bank accounts will also be determined by the Limited Partnership Agreement.

Each party shall make contributions to the Fund in accordance with the Limited Partnership Agreement. The government of Ukraine shall ensure that the contribution of the Ukraine Partner shall be made on the effective date of the Limited Partnership Agreement in the form of an irrevocable right to receive income agreed with Ukraine, which shall be subsequently transferred to the Fund.

Such agreed income is 50% of royalties (rental payments) from licence fees and amounts under subsoil use agreements and production sharing agreements with subsoil users received by the Ukrainian governmental authorities in connection with new licences or permits issued after the effective date of the Limited Partnership Agreement or permits issued earlier but not yet used for industrial purposes.

This income will first be transferred to a special fund of the state budget, from which it will be transferred to the Ukraine Partner, and then from him to the Fund.

If the United States provides new military assistance to Ukraine after the date of entry into force of the Limited Partnership Agreement, the capital contribution of the US Partner will be increased by the estimated value of this assistance.

The government of Ukraine also obliges the relevant state authorities to include in licences, permits and subsoil use agreements and production sharing agreements with subsoil users conditions that oblige the recipients to provide the Fund with investment information in accordance with the Limited Partnership Agreement when raising capital.

If the Fund expresses interest in a project, the recipients must negotiate with the Fund and not offer third parties more favourable terms for similar investments.

The US partner has the right to negotiate the purchase of extracted minerals on market terms, and the licence recipients have the right to refrain from making more favourable offers to third parties.

Minerals

The list of minerals, the income from licences and special permits for the extraction of which will be partially transferred to the Fund, includes 57 types of minerals, namely:

metallic minerals – aluminium, stibium, arsenic, beryllium, bismuth, cerium, cesium, chromium, cobalt, copper, dysprosium, erbium, europium, gadolinium, gallium, germanium, gold, hafnium, holmium, indium, iridium, lanthanum, lithium, lutetium magnesium, manganese, neodymium, nickel, niobium, palladium, platinum, praseodymium, rhodium, rubidium, ruthenium, samarium, scandium, tantalum, tellurium, terbium, thulium, tin, titanium, tungsten, uranium, vanadium, ytterbium, yttrium, zinc, zirconium;
non-metallic minerals – barite, fluorine, fluorite, graphite, potassium;
fuel minerals – oil, natural gas.

However, this list may be expanded by consent of the parties.

This Intergovernmental Agreement shall enter into force on the date of the later of the exchange of notes between the parties stating that each party has completed its internal procedures for entry into force.

In the event of a dispute regarding the interpretation or application of this Intergovernmental Agreement, such dispute shall be resolved through mutual consultations, which is significantly different from the previous version of the agreement, according to which such disputes would be submitted to the New York court.

We will continue to closely monitor the further the development of further agreements in this area and report on them in the future Legal News.