First $30 mln deal: US-Ukraine fund begins investing in Ukraine's critical minerals and energy sectors
Фото: Depositphotos.com
The joint US-Ukraine Reconstruction Investment Fund has signed its first deal in the extraction of minerals that the United States considers critical. The investment is worth around $30 million. Overall, the fund has launched five projects worth a total of $70 million.
Reuters reports, citing Conor Coleman, head of the investment division at the US International Development Finance Corporation (DFC).
According to Coleman, the first deal and the other projects demonstrate Washington's support for Ukraine.
"It is absolutely imperative for the Ukrainian people that we're investing now," Coleman said.
The first deal involves a joint investment platform with BGV Group, with around $30 million to be invested. BGV Group is a Ukrainian corporation founded by Hennadii Butkevych, co-owner of the ATB supermarket chain.
Under this and other projects, the fund will work with early-stage mining projects in different regions of Ukraine. The resources covered by these projects include rare earth elements, uranium, beryllium, and zirconium deposits.
"All of these are on the US critical minerals list, so it ties in very well with what we're looking to do in terms of the administration's priorities," Coleman said.
At the same time, the fund has launched several other projects related to Ukraine's energy sector. Two of them involve supporting electricity grids and heating systems ahead of winter.
One of these projects involves nearly $100 million in financing for DTEK. The funds will support the development of a new battery storage system capable of providing backup power to around 600,000 Ukrainian households for up to two hours.
The new agreement will give the company access to capital if its equipment is damaged by Russian strikes.
In addition, the investment fund will acquire a stake in a combined heat and power generation platform that will develop a network of decentralized energy hubs. These hubs are intended to help restore basic services to Ukrainian households.
Coleman said the fund is also seeking additional capital to expand its capacity.
The head of the investment division added that the fund's projects currently total around $70 million, describing this as a sign of Washington's support for Kyiv during its ongoing war with Russia.
What is known about the minerals agreement with the US
On the night of April 30–May 1, Ukraine and the United States signed an agreement to establish a joint Reconstruction Investment Fund, with both sides holding equal shares.
It is worth noting that on May 8, the Ukrainian parliament ratified the minerals agreement signed by Ukraine and the United States. It sets the political framework for cooperation between the two governments on the development of Ukraine's subsoil and the sale of minerals, as well as future US assistance, including military aid, that Ukraine will receive. The minerals agreement between Ukraine and the U.S. covers 57 types of minerals.
On May 23, the US-Ukraine Reconstruction Investment Fund was officially launched.
Ukraine has significant deposits of rare earth metals, which are important for modern technologies. The main deposits are located in Zhytomyr and Cherkasy regions and the eastern Azov Sea area.
In addition, Ukraine's temporarily occupied territories hold critical materials estimated to be worth around $350 billion. According to previous reports, up to 20% of Ukraine's mineral resources, including around half of its rare earth element deposits, are under Russian occupation.
