Kyiv and Washington are celebrating a new agreement to jointly develop Ukraine’s natural resources after weeks of tense negotiations. However, the deal still has a long way to go before financial commitments materialize.
Officials and experts close to the negotiations view the current version as an improvement over earlier drafts but emphasize that it is only a preliminary step. With no formal signatures yet, further negotiations could alter the agreement in the coming days.
“It’s much better compared to what we saw before. I don’t see any traps, but we need to conclude,” said Oleksandr Merezhko, a Ukrainian MP.
After extensive discussions, Kyiv and Washington reached an agreement on February 25, dropping key Ukrainian objections. These included a $500 billion reconstruction fund requirement and a 2:1 investment clause that would have obligated Kyiv to double U.S. aid contributions.
The agreement establishes a reconstruction fund to be co-managed by both countries. Ukrainian state-owned enterprises involved in mineral deposits, oil, gas, hydrocarbons, and infrastructure such as liquefied natural gas terminals and ports will allocate 50% of their future revenue to the fund. These contributions will be invested annually to attract foreign investment into Ukraine’s natural resources sector. The fund’s publicity alone could attract interest from U.S. investors, according to Serhii Fursa, deputy managing director at Dragon Capital.
The current draft resembles a memorandum of understanding rather than a binding international treaty, meaning it does not require Ukrainian parliamentary ratification. A second "Fund Agreement," which will be negotiated next, will need parliamentary approval.
At present, the agreement is largely symbolic, showcasing Kyiv and Washington’s commitment to shared goals, said Edward Chow, a senior associate at the Center for Strategic and International Studies. However, without clear mechanisms for fund management, there is a risk of unfulfilled expectations, he warned.
Presidents Volodymyr Zelensky and Donald Trump may sign the agreement in Washington on February 28. While it does not include security guarantees for Kyiv, the presence of American assets in Ukraine could incentivize U.S. investment in Ukraine’s defense.
“Americans tend to defend countries where they have investments and economic interests,” Merezhko noted. Increasing American and European business presence in Ukraine would strengthen both its economy and security.
American involvement in Ukraine’s state-owned enterprises—over 3,000 in total—could lead to improved governance, said Andy Hunder, head of the American Chamber of Commerce in Ukraine. He emphasized the potential for better management to yield positive financial results.
The agreement specifies that revenues will not be sourced from state enterprises already contributing to the general budget, meaning major taxpayers like Naftogaz are excluded. It also includes provisions to ensure that adversarial nations do not benefit from Ukraine’s reconstruction, a clause Merezhko suggests could be aimed at China.
The U.S. is also working to weaken Russia’s economic ties with China, as evidenced by State Secretary Marco Rubio’s recent remarks about preventing Moscow from becoming Beijing’s “junior partner.”
Zelensky has emphasized the importance of maintaining Ukrainian control over the fund, rather than ceding authority to the U.S. The removal of the 2:1 investment clause and the absence of debt obligations were key improvements, he stated.
“The most risky factors are off the table,” Fursa said, calling the deal “much more acceptable” as it eliminates requirements for Kyiv to repay U.S. aid.
The future of the minerals agreement remains uncertain. If executed correctly, the reconstruction fund could channel much-needed capital into Ukraine and attract American investors. However, key details—such as fund management, jurisdiction, size, and timeframe—remain unresolved. Additionally, Ukraine’s tax laws would need amendments to redirect revenue from the state budget to the fund.
Fursa cautioned that the fund might never materialize due to insufficient revenue and a lack of direct U.S. investment. Trump appears to anticipate that private American companies will enter Ukraine and secure top investment opportunities.
Initially, Ukraine offered its critical mineral deposits to Trump, boasting trillions of dollars’ worth of untapped raw materials. Hopes were high within Ukraine’s underfunded mining sector that American capital and technology would drive new developments. However, with the agreement now covering all natural resources—including oil and gas—critical minerals have become less central.
George Popov, a research analyst at the National Association of Extractive Industry of Ukraine, expressed concerns over the lack of guaranteed investment in mining. He emphasized the need for American support in resource exports, infrastructure development, and geological exploration.
Volodymyr Landa, a senior economist at the Kyiv-based Center for Economic Strategy, believes prioritizing new deposits over existing mines and privatizing some state-owned mining companies would be beneficial. However, he stressed that sustainable investment requires “long and lasting peace.”
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