Prime Minister of Ukraine Denys Shmyhal commented on the agreement between Ukraine and the United States of America on the establishment of a Reconstruction Investment Fund.
Source: “Espreso”
This was reported by Espreso correspondent Nataliia Starepravo.
Denys Shmyhal emphasized that the agreement between Ukraine and the USA is “fair, equal, and effective.”
“President of Ukraine Volodymyr Zelenskyy clearly defined the priorities of this agreement and the red lines, and this was duly taken into account during the negotiations,” the Prime Minister added.
Main Provisions:
- A Reconstruction Investment Fund is being created, which will be managed equally by Ukraine and the United States of America.
“Neither side will have an advantage in it, all decisions will be made jointly,” the Prime Minister noted.
- The fund is an investment tool for Ukraine, not a mechanism for asset transfer.
“That is, all Ukrainian natural resources remain with Ukraine. The scope of the agreement also does not include state enterprises and privatization,” Shmyhal added.
- The fund will be financed by the United States and Ukraine in a 50/50 ratio.
“From the U.S. side, these will be cash contributions or new military aid, for example, air defense systems. Ukraine’s contribution is 50% of royalties from new — I emphasize, new — licenses for the extraction of oil, gas, and critical minerals. I stress that revenues from already launched projects are not included in the fund, which is important from the perspective of budget revenues,” Denys Shmyhal emphasized.
- According to the Prime Minister, for the first 10 years, the fund’s profits will not be withdrawn from Ukraine but reinvested, including in natural resource extraction, infrastructure, or processing.
- The fund will guarantee commercial product purchases under “take-or-pay” terms.
“This means there will be guaranteed demand for the products. At the same time, the agreement does not contain any discriminatory conditions for other partners or provisions for selling goods and resources to American companies at disadvantageous prices for Ukraine,” the Prime Minister noted.
- Through the American agency DFC, the fund will attract the latest American and European technologies to accelerate Ukraine’s recovery and modernization.
- The agreement does not mention any debt obligations of Ukraine.
“We do not recognize as debts what was previously provided by the USA based on Congressional decisions in the form of grant aid,” Denys Shmyhal emphasized.
- The fund’s income will not be taxed by the United States or Ukraine.
“Critical minerals exported to the USA will not be subject to tariffs, which in current conditions provides unique opportunities for trade development,” the head of the government clarified.
- The agreement does not contradict other international obligations of Ukraine.
“It will not hinder further European integration or EU membership. We will invite European companies and investors to cooperate. The agreement essentially aligns with our formula: united in defense, united in recovery,” the Prime Minister explained.
- According to Denys Shmyhal, “considering the scale of the agreement, additional technical steps are needed.”
“These are not intergovernmental documents, but institutional ones, which in critical matters are fundamentally agreed upon and do not go beyond the agreement but develop it. The fund will be created for decades, so its creation is not a one-day process. And not a single decision. The negotiating team, upon returning from Washington, will be available to members of parliament 24/7 and will answer all additional questions about the agreement,” Denys Shmyhal concluded.
On the Agreement’s Compliance with the Ukrainian Constitution
As emphasized by the head of the Ukrainian government, the agreement on the creation of the Reconstruction Investment Fund complies with the Constitution of Ukraine and does not contradict national legislation.
“These are mutually beneficial agreements that create a positive dynamic for our reconstruction, our development for decades to come. There are many examples in the world of countries that, having the USA as a strategic economic partner, achieved a true economic miracle. For them, a strong economy and prosperity became the best guarantee of security,” Denys Shmyhal added.
Where the Minerals Will Be Extracted
As the Prime Minister stated, the agreement provides for the extraction of minerals throughout the entire territory of Ukraine as defined by the 1991 borders.
“The agreement covers all sovereign territory of Ukraine, without question… It covers all regions, the entire territory defined by the 1991 borders,” Shmyhal emphasized.
He also noted that the agreement does not violate Ukraine’s European integration obligations or “environmental commitments to communities or Ukrainian society.”
“The agreement in no way violates environmental standards and requirements of Ukrainian legislation, particularly the parts aligned with European directives. Therefore, there is no reason to worry about the fulfillment of our environmental standards,” Shmyhal concluded.
On Investment Opportunities
The Ukrainian Prime Minister expressed the opinion that “this agreement is an absolute achievement for our country.”
“I am confident that it will become one of the largest, most effective, and most important investment tools for Ukraine. A fund will be created. It is important that this is a partnership fund, 50/50. We are working with the United States, and the fund’s management will also be conducted on equal terms, 50/50. That is, a relevant board will be created — 3 representatives from Ukraine and 3 from the United States. The fund will invest in mineral extraction, processing, industrial development, and may also invest in infrastructure. It is important that all ownership of minerals and infrastructure remains with Ukraine, it is our sovereign right. And the fund will be solely an investment fund, or as such entities are called, a direct investment fund,” Shmyhal explained.
He noted that it is too early to assess the volume of the Investment Fund, but he expressed confidence that it would amount to “tens or possibly hundreds of billions of dollars.”
“This is our goal for such investments, and we are discussing this with our partner — the United States of America. We are looking at how similar funds established by the United States in other countries of the world in the 21st century worked. Indeed, such funds became breakthrough instruments for investment and economic development for each of those countries. Accordingly, for Ukraine, this is an absolutely right and promising perspective,” the Prime Minister concluded.
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