U.S.-Ukraine Reconstruction Investment Fund not intended for social investments

Ukrainian Prime Minister Denys Shmyhal has clarified that the newly established U.S.-Ukraine Reconstruction Investment Fund is not designed for social investment.

"This is a private equity fund operating on a commercial basis. The funds accumulated will be directed toward investment activities and can be used for mineral extraction, processing, and technological advancement in industrial enterprises. Accordingly, the fund does not foresee any social investment," he stated during the government's Q&A session in the Verkhovna Rada on Friday, livestreamed by MP Oleksiy Honcharenko (European Solidarity faction).

As reported, on April 30, the United States and Ukraine signed an agreement to establish the recovery fund with equal 50/50 participation. The agreement, consisting of 12 articles, outlines a list of critical materials, oil, and gas and has a financial focus. The Ukrainian side is represented by the Public-Private Partnership Agency under the Ministry of Economy, while the United States is represented by the U.S. Development Finance Corporation (DFC).

On May 8, the Verkhovna Rada ratified the agreement and passed the first reading of the necessary amendments to the Budget Code, with final adoption expected in early June. On May 13, DFC and the Ukrainian PPP Agency signed the founding agreement for the U.S.-Ukraine Reconstruction Investment Fund, formalizing the intergovernmental agreement ratified by parliament.

The fund is authorized to invest in mineral extraction projects and related infrastructure. Moreover, under the terms of the agreement, new license holders are required to offer the fund a participation opportunity in extraction projects if they lack the internal capacity, and in the products derived from the development of these deposits.