U.S.-Ukraine resource partnership faces major hurdles
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The long-awaited deal creating a United States-Ukraine Reconstruction Investment Fund faces huge questions, in part due to war-related damage to Ukraine's infrastructure.
Why it matters: The 50-50 fund gives the U.S. preferential access to Ukraine's critical minerals, oil and gas.
- Trump officials contend it will increase U.S. involvement in Ukraine's economy and serve as a partial security guarantee because the U.S. will want to secure its investments, Axios' Barak Ravid reports.
Reality check: In the near term, however, it's not clear how much it will help pressure the Kremlin to back off its assault.
- Longer term, as Axios wrote in February, there are lots of hurdles to major new minerals projects in the country that now has degraded infrastructure.
- They range from dated and incomplete resource estimates, and private companies and investors may be wary of ongoing security risks.
The big picture: "Ukraine's richest natural resource deposits — the actual extent and value of which are disputed — are either under occupied territory or close to the front line, making peace a prerequisite for their development, rather than the other way around," Semafor's Tim McDonnell wrote Thursday morning.
How it works: Ukrainian Deputy Prime Minister Yulia Svyrydenko's walk-through on X notes it will be funded exclusively from new licenses.
- Ukraine expects that for the first 10 years, all profits and revenues will be re-invested into new Ukrainian projects or reconstruction, she notes.
What they're saying: The deal "sends a strong signal to the world that Ukraine is open for business," Maxim Timchenko, CEO of DTEK, Ukraine's largest private energy company, said in a statement.
- "This agreement provides the framework to accelerate private investment into an energy sector with some of the largest untapped reserves in Europe. With two decades of experience in resources extraction and energy generation, DTEK is ready to partner with foreign investors to bring this agreement to life."
What we're watching: Svyrydenko expressed confidence the deal would help attract investments and tech from the U.S., EU and beyond.
Go deeper: The AP has a detailed primer.
