How Will the US-Ukraine Reconstruction Investment Fund Function?

On May 8, 2025, the Verkhovna Rada of Ukraine ratified an agreement on the establishment of a joint investment fund between Ukraine and the United States. This decision was voted for by 338 members of parliament. What real benefits will this bring to both sides?

Even earlier, on April 30, 2025, the Cabinet of Ministers of Ukraine approved the draft Agreement. A Ukrainian government delegation traveled to Washington to sign the agreement. U.S. Secretary of the Treasury Scott Bessent and First Vice Prime Minister of Ukraine and Minister of Economy Yulia Svyrydenko signed the Agreement.

The framework text of the Agreement is available, which will be filled with specific content in the course of drafting the relevant Regulations on the Fund's operation.

According to an official statement from the Government of Ukraine, the Investment Fund for Reconstruction will channel funding into critical mineral development projects while also supporting innovation, technological advancement, and post-war recovery initiatives.

A US-Ukraine Reconstruction Investment Fund will have Far-Reaching Impact

The agreement is beneficial for both countries, as it will attract additional investment, promote innovation and introduce new technologies. The United States is helping to attract private and public investors to Ukraine's recovery, including foreign funds, companies, and governments that support Ukraine's fight against Russian aggression. 

U.S. companies will have access to new opportunities offered by the joint development of natural resources and Ukraine's recovery.

Ukrainian Sovereignty Remains Intact

From Ukraine’s standpoint, several key guarantees are already evident in the long-awaited US-Ukraine agreement. The document complies with the Constitution and reinforces Ukraine’s commitment to EU integration, while remaining fully consistent with domestic legislation and international obligations. Importantly, Ukraine retains full control over its subsoil, territorial waters, and natural resources—only the Ukrainian side will determine where and under what conditions extraction takes place. The agreement also safeguards state property, ensuring that all state-owned enterprises remain under Ukrainian ownership and are unaffected by any privatization processes. To implement the Fund, only limited amendments to the Budget Code of Ukraine are required, and the agreement itself will be subject to ratification by the Verkhovna Rada.

How the Fund Will Work

Each party will make its respective contributions to the Fund. At the initial stage, there will be conditional rights to use new Ukrainian natural resource deposits (except for those already in operation) – this will be the contribution of the Ukrainian side.

The U.S. contribution will be property rights under loan agreements and agreements for the supply of various technical assistance to Ukraine, primarily weapons.

These are the property rights to receive payment under such contracts from the Ukrainian side, i.e. a kind of financial factoring, similar to the way banks buy the right to receive payment under contracts.

That is, after the transfer of such a right to receive funds under the contracts, Ukraine will already be a debtor to the Fund, not the United States.

In the future, Ukraine will have to pay the Fund this money, but in reality, such transactions are unlikely to take place. This debt will be repaid at the expense of the Fund's profits, which will be accrued on the Ukrainian contribution.

For example, the Fund earned a profit of $1 billion, which is distributed between the parties according to their contributions. Let's take the proportion of 50/50.

In this case, the Fund will have to pay conditionally $500 million of the profit to the Ukrainian side, as well as to the American side.

But the profit of the Ukrainian side will not actually be paid out – it will immediately be used to pay off Ukraine's debt under contracts with the United States, the right to receive payment for which will be transferred by the American side to the Fund.

This will continue until Ukraine repays its debt under all these contracts: loan and logistics supply agreements.

No Legacy Debt, Only Future Agreements

At this stage, the parties have agreed on a key position – we are talking only about new loan contracts, including arms supplies.

That is, Trump's earlier wishes to include Ukraine's “$350 billion” undocumented debt to the United States (which, according to official documents, does not exist) in the Fund's liabilities/assets have not yet been granted.

In addition, we are talking exclusively about new mineral deposits that have not yet been distributed among subsoil users.

These are mainly valuable minerals and energy resources: lithium, graphite, germanium, titanium, niobium, tantalum, strontium, manganese ore, etc. As well as oil and natural gas.

A significant portion of liquid minerals used in the new technological mode and available to Ukraine will be managed by the Fund. 

Particular attention should be paid to graphite, germanium, and lithium, as Ukraine has significant deposits of these natural resources, especially graphite and germanium.

We should pay attention to manganese ore, as Ukraine has more than 50% of the world's reserves of this raw material, which plays a significant role in metallurgy (production of ferroalloys).

A Powerful Structure With Broad Authority

The Fund will be managed on a parity basis by representatives of Ukraine and the United States. But given the influence of the American Embassy in Ukraine, it will most likely be a purely pro-American board.

The form of creation of the Fund is a partnership. Ukrainian oligarchs have entered into almost the same partnerships with each other, but they have never done so with the state.

That is, we have a kind of scheme of the Fund's functioning:

The Fund receives assets in the form of mineral deposits.

The Fund receives rents and invests them in the formation of strategic infrastructure for the export of these raw materials: railways, ports, etc.

The Fund distributes among its participants the profits received both in the form of raw material rent for issuing mining permits and in the form of income from the operation of infrastructure facilities.

In effect, the Fund concentrates the entire value chain in the Ukrainian subsoil use system: issuing permits, receiving royalties, developing raw materials and transportation infrastructure for the export of raw materials, receiving logistics and transportation revenues from its export.

At the same time, the Fund's profits will not be taxed in Ukraine, and the repatriation of income to the United States (after 10 years of operation) will not be subject to Ukrainian currency regulation. This means that it will be impossible to ban this export of capital from the country.

It should be noted that this is still a framework agreement that has yet to be filled with real content, which will be disclosed in further regulatory documents concluded by the parties.

The investment nature of the agreement can be disclosed only after the war is over, which creates a certain motivation for the United States to provide Ukraine with new packages of financial and military-technical support.

Oleksiy Kushch, financial analyst, economist, expert at United Ukraine Think Tank