On April 30, 2025, the United States and Ukraine signed an agreement (the “Agreement”) establishing a framework for the creation of the United States-Ukraine Reconstruction Investment Fund (the “Partnership”). The Partnership will be a joint natural resources and infrastructure investment fund between the U.S. and Ukraine. The U.S. International Development Finance Corporation (“DFC”) will play a critical role by serving as a limited partner of the Partnership alongside Ukraine’s State Organization Agency on Support of Public-Private Partnership. The Agreement does not identify the general partner.
The Agreement, by operation of its terms, provides the Partnership with preferential rights to participate in natural resources and public-private partnership projects and DFC (or DFC’s assignee) with preferential rights to negotiate offtake arrangements with respect to critical minerals projects. The U.S. and Ukraine are still in the process of finalizing the limited partnership agreement, which is expected to further clarify the operations of the Partnership. The key provisions of the Agreement, including capital contributions, investment rights, and offtake arrangements, are summarized below.
Capital Contributions
- Ukraine will contribute to the Partnership 50% of the amounts received by Ukrainian governmental authorities for licenses, permits, and production sharing agreements relating to the exploration, extraction, and processing of “Natural Resources Relevant Assets.”[1]
- The U.S. capital contribution to the Partnership will be increased by the assessed value of any new military assistance the U.S. provides to Ukraine in accordance with the limited partnership agreement.
- The Agreement does not indicate how the Partnership will be initially capitalized.
Investment Opportunity Rights
- Ukrainian governmental authorities responsible for licenses and permits relating to Natural Resources Relevant Assets and Ukrainian governmental authorities responsible for public-private partnership agreements and concessions must include in the relevant license, permit, or agreement, a provision requiring the recipient thereof to make “relevant investment information” available to the Partnership at any time the recipient is seeking to raise capital.
- When the Partnership expresses formal interest in “participating” in one of these natural resources or infrastructure projects, the relevant Ukrainian governmental authority must include in the relevant license, permit, or agreement, provisions requiring the recipient thereof to grant to the Partnership a right similar to a right of first refusal. Specifically, the recipient must engage in good faith negotiations with the Partnership and refrain from granting to any third party materially more favorable economic terms than those offered to the Partnership.
- The Agreement does not specify the precise nature of the Partnership’s participation in these projects and whether such participation may extend beyond direct investment.
Market-Based Offtake Rights
- The Agreement provides a critical role for DFC, allowing DFC (or DFC’s assignee) to negotiate offtake rights in respect of projects involving Natural Resources Relevant Assets.
- Specifically, the Agreement requires Ukrainian governmental authorities responsible for licenses or special permits relating to Natural Resources Relevant Assets to include in the relevant license or permit: (1) provisions allowing DFC (or DFC’s assignee) to negotiate offtake rights on market-based commercial terms, and (2) prohibiting the license or permit recipient from offering to any third party materially more favorable economic terms for offtake than those provided to DFC (or DFC’s assignee).
The Agreement provides a broad framework for U.S.-Ukraine cooperation in investing in critical minerals and infrastructure projects in Ukraine. DFC will play a critical role by serving as limited partner of the Partnership and by having the right to negotiate offtake arrangements for a wide array of natural resource projects in Ukraine. Further details regarding the limited partnership agreement and implementation of the Agreement are expected in the near future.
[1] The Agreement defines “Natural Resource Relevant Assets” as the sites, reserves, and deposits in the territory of Ukraine of aluminum, antimony, arsenic, barite, beryllium, bismuth, cerium, cesium, chromium, cobalt, copper, dysprosium, erbium, europium, fluorine, fluorspar, gadolinium, gallium, germanium, gold, graphite, hafnium, holmium, indium, iridium, lanthanum, lithium, lutetium, magnesium, manganese, neodymium, nickel, niobium, palladium, platinum, potash, praseodymium, rhodium, rubidium, ruthenium, samarium, scandium, tantalum, tellurium, terbium, thulium, tin, titanium, tungsten, uranium, vanadium, ytterbium, yttrium, zinc, zirconium, oil, natural gas (including liquified natural gas), and other minerals or hydrocarbons otherwise agreed by DFC and Ukraine’s State Organization Agency on Support of Public-Private Partnership.