Washington, DC, and Kiev signed a historic agreement to create a revenue funded investment fund of natural resources exploration. But after all what is at stake and what changes in the face of previous versions?
On Wednesday, the United States of America and Ukraine to create a joint investment fund for the reconstruction of the country devastated by the war. The fund will be financed, in part, for future revenues from the exploitation of natural resources, such as oil, gas and strategic minerals and marks a new step in relations between the two countries.
What makes the agreement signed different from previous versions?
According to the Center for Strategic and International Studies (CSIS), this new agreement is more favorable to Ukraine than previous proposals. For the first time, Ukraine maintains the total property of its natural resources and existing infrastructure. All decisions of exploration are made exclusively by Ukrainian authorities: a radical cut with previous versions that required shares or assignments.
How will it be funded?
Ukraine is committed to channeling 50% of revenues from new resource extraction projects to the fund. However, state -owned companies already in operation, such as naphtogaz and UKRNAFTA, are exempt. This means that the fund’s success will depend on the feasibility of new investments in the sector. The goal is to attract private capital and stimulate the development of the sector.
Does military support enter this equation?
Yes. The agreement states that any future US military aid – whether in weapons, ammunition or training – will be considered an investment in the background.
In addition, Ukraine will not have to reimburse Washington, DC for the supports already received, unlike the first version of the agreement, which provided for a reimbursement of $ 500 billion.
Do the US now have direct access to Ukraine minerals?
Not directly. The agreement does not grant the US automatic rights on Ukrainian resources. However, it includes a clause that allows US companies to negotiate the purchase of minerals under market commercial conditions, provided that these negotiations occur under the established partnership.
Can the agreement be effective without peace achieved between Russia and Ukraine?
A few hours after the signing of the agreement, Russia launched new missile attacks on the Ukrainian city of Odessa, revealing that the safety risks on the ground remain high. According to CSIS, without lasting peace or clear security guarantees, the private investment required for this plan will hardly advance.
According to CSIS experts, on average, the development of a world mine takes about 18 years and requires an investment between $ 500 million and a thousand million to build the mine and a separation installation. Since a mine can work for over 50 years, investors’ confidence in political and economic stability is essential due to the scale and long -term nature of investment. Many of the most rich mineral regions are in areas occupied by Russian forces, which raises serious logistical and political difficulties.
What are the main obstacles to the exploitation of Ukrainian resources?
First, experts consider that Ukraine needs a modern geological survey. Although the country has a diverse set of minerals, there is a significant lack of data that prevents the mobilization of investments in exploration and production. Existing information was produced by the Soviet Union for over 30 years, with outdated methods. Without updated data on reserves, depth or quality of the ore, investment becomes risky.
In addition, the country’s energy infrastructure was severely damaged by war. Between 2022 and 2023, almost half of Ukraine’s energy production capacity was destroyed or occupied. Consequently, Ukraine now has only about a third of its electricity prior to war. An energy reconstruction will be essential before any large -scale extraction project can advance.
Is this agreement part of a larger US strategy?
Yes. According to CSIS, the agreement signals a clear change in US foreign policy, with critical minerals to assume a central role. Trump administration has adopted a transactional approach to ensure access to strategic resources, and even the US has already started similar understandings with countries such as the Democratic Republic of Congo.
