The United States is striving to control all major infrastructure and mineral investments in Ukraine’s future, which may give it a veto over any role played by other allies of Kyiv and undermine its efforts to join the European Union.
According to a draft document obtained by Bloomberg News, President Donald Trump’s administration has demanded that it be given a “right of first refusal” on all infrastructure and natural resource projects under a revised cooperation agreement with Ukraine.
If this cooperation agreement is accepted, the United States will gain significant power to control investment in Ukraine’s roads and railways, ports, mines, oil and gas, and key mineral extraction projects. This would represent an unprecedented expansion of economic influence by the United States in the largest country in Europe as it attempts to form an alliance with the European Union.
The agreement will grant the United States priority claim on profits transferred to a special reconstruction investment fund, which will be controlled by Washington. Crucially, the document states that the “material and economic benefits” the United States has provided to Ukraine since Russia’s full-scale invasion in February 2022 will be regarded as contributions to the fund.
In fact, this means that the Trump administration will force Ukraine to pay back all the military and economic support provided by the US since the start of the war before Kiev can receive any income from the cooperation fund.
Last weekend, the United States submitted a revised agreement to officials in Kyiv. The plan for Ukrainian President Volodymyr Zelensky to sign an earlier agreement had fallen apart after a tense confrontation with Trump in the Oval Office last month. The White House said last week that the US government was going beyond the earlier negotiated agreement covering Ukraine’s key minerals.
The two sides are still in discussions and the final draft may include changes to the terms. A person familiar with the matter told Bloomberg that Ukraine may make its own changes to the US document this week.
Zelensky told reporters in Paris on Thursday while attending a summit of European leaders that the full agreement proposed by the United States needs “detailed study” and that the terms have been changing during the negotiations. Although it is too early to say that an agreement has been reached, “we support cooperation with the United States and we do not want to send any signals that could lead to the United States stopping its aid to Ukraine,” he said.
A spokesperson for the US Treasury Department said in response to a request for comment that the United States remains committed to reaching an agreement quickly and ensuring lasting peace between Ukraine and Russia.
James Hewitt, the spokesperson for the US National Security Council, said: “The minerals agreement offers Ukraine an opportunity to establish a lasting economic relationship with the United States, which is the foundation for long-term security and peace. This will strengthen the relationship between our two countries and benefit both sides.”
Zelensky has been trying to attract investment from Ukraine’s allies in the country as part of his so-called “Victory Plan” to help the country defend against future Russian aggression. Shortly after taking office in January this year, Trump put forward his own demands, asking for an agreement to obtain Ukraine’s key minerals as compensation for the US providing support in the war.
Trump has taken steps to reach an agreement with Ukraine, and he has also urged Zelensky and Russian President Vladimir Putin to reach an agreement to end the war. So far, the United States has urged Ukraine to make a series of concessions, including possibly giving up its sovereignty claims over the territories occupied by Russia, but has made almost no demands on Putin.
Ukraine was granted candidate status for the European Union in 2022 and will start formal accession negotiations, a process that could take several years to complete. The situation could become more complicated if the United States effectively controls investment decisions in most areas of Ukraine’s economy.
Ukraine had previously stated that its agreement with the United States could not conflict with its Association Agreement with the European Union. Ukraine had also rejected the US demand to include Washington’s past support for Ukraine in the contribution quota of the joint fund.
According to the draft, the US International Development Finance Corporation (DFC) will control the investment fund by nominating three of the five board members and holding a “golden share”, which grants it special voting rights to block certain decisions. Ukraine will nominate the other two directors and be prohibited from interfering in the fund’s day-to-day management.
The government of Kyiv must invest 50% of the profits it earns from all new natural resource and infrastructure projects into this fund. The draft stipulates that the United States is entitled to all the profits and a 4% annual return until its investment is fully recovered.
Ukraine must submit all projects to the International Development Association for review “as soon as possible”, and the International Development Association will obtain a seat on the board or supervise all funded projects. For at least one year, Kiev is not allowed to offer “substantially better” terms to other parties.
Furthermore, according to the draft, regardless of whether the fund provides financing for the project or not, the US government has the right to purchase Ukraine’s metals, minerals, oil and natural gas on commercial terms ahead of other parties.
This agreement has no time limit and also prohibits Kyiv from selling key minerals to the “strategic rivals” of the United States.
