On 30 April 2025, Ukraine and the United States signed the Agreement establishing the U.S.–Ukraine Reconstruction Investment Fund (URIF, hereinafter – the Fund). The Fund was conceived as a mechanism for attracting investment into mineral extraction, energy, and supporting infrastructure.
Nearly a year has passed since the Agreement was signed – sufficient time to assess the first practical results and the risks for business and investors.
Two trends have emerged:
(i) the Fund’s actual investment mandate appears broader than the Agreement’s original framing suggested;
(ii) the regulatory framework for certain project types – most notably production sharing agreements (PSAs) for solid minerals and midstream processing – is still being adapted. This review examines what is already working, what signals the Fund’s early decisions have sent to the market, and where legal uncertainty persists for project parties.
Structure of this review:
- the Fund’s institutional launch and early results;
- regulatory developments in PPP/concessions and subsoil use;
- key issues raised at NYAW;
- what the Fund’s first investment means for business;
- the status and risks of PSA regime reform.
Early Results
In its first year of implementation, the Fund reached operational readiness. On 18 December 2025, the Board of Directors approved the investment protocols and announced the commencement of investment activity. In January 2026, the Fund launched an online proposal portal and received over 200 applications. In March 2026, the Fund made its first investment and confirmed its intention to close at least three investment agreements by the end of 2026.
In parallel with the Fund’s institutional launch, the state adapted its regulatory framework. For large infrastructure projects, the primary instruments remain public-private partnerships and concessions; for subsoil projects, they are special permits, subsoil use agreements, and production sharing agreements (PSAs). These mechanisms became the first focus of reform following the signing of the Agreement.
In June 2025, Ukraine adopted a new Law on Public-Private Partnerships, substantially modernising the PPP and concession regime. The reform aims to accelerate project preparation, simplify the involvement of private partners, and digitalise tender procedures. Particular emphasis was placed on more flexible financing models for infrastructure projects, including the ability to combine private, public, and donor funding.
In the subsoil sector, one of the first steps was the approval, in December 2025, of new model subsoil use agreements. These set out in detail the mechanism for subsoil users’ interaction with the Fund.
The signing of the Agreement also revived the PSA mechanism, which had effectively been dormant under martial law. A landmark event was Ukraine’s first-ever tender for a PSA in respect of metallic minerals – the Dobra lithium deposit. In January 2026, Dobra Lithium Holdings JV, LLC was named the winner.
NYAW and Key Implementation Issues
In November 2025, six months after the Agreement was signed, K&L Gates LLP and Vasyl Kisil and Partners, with the support of ICDR–AAA and USUBC, held an event during New York Arbitration Week titled “U.S.–Ukraine Minerals Deal: Managing the Risks of Implementation and Potential Disputes.” The aim was to bring together government representatives and the business community: to hear from officials on the Fund’s launch and to obtain practitioners’ assessments of key project risks and potential disputes.
The discussion involved representatives of the Ukrainian government, DFC, USUBC, and institutional arbitration (ICDR–AAA), as well as practitioners from international law firms. Speakers included Maria Kostytska (K&L Gates LLP, moderator), Yegor Perelygin (Ministry of Economy of Ukraine), Jonathan Taylor (DFC), Irina Paliashvili (USUBC), Oleg Alyoshin (Vasyl Kisil and Partners), and Yanett Quiroz (ICDR–AAA).
Many of the issues raised at the event remain relevant today. Subsequent developments have made it possible to assess them in light of actual practice. Among the key themes:
Natural gas as a near-term priority. At the event, it was suggested that the Fund’s earliest projects would likely be in the gas sector, given shorter payback periods and the ability to demonstrate results quickly to investors and both governments.
Brownfield projects first. In the near term, the Fund is focused primarily on brownfield projects – those with an established resource base, infrastructure, or prior production activity – with reserves confirmed under international standards (JORC or NI 43-101). Greenfield projects, which involve developing deposits from scratch, are seen as a medium- to long-term prospect.
Stabilisation clauses and investment disputes. The event included a detailed discussion of the state’s ability to guarantee a stable legal environment for investors. Stabilisation clauses in PSAs, concession agreements, and PPP contracts play a central role: they are designed to protect investors from adverse legislative changes over the life of the contract. At the same time, such clauses typically contain carve-outs – particularly in the areas of national security and environmental protection – and do not provide absolute protection. Notably, stabilisation provisions are frequently at the centre of investment disputes in international arbitration.
The first PSA tender for metallic minerals and the need for amendments to the Law on PSAs. Participants noted that Ukraine’s PSA Law was developed for the hydrocarbon sector and was not designed for solid minerals, and therefore requires updating. The view expressed was that current regulation covers extraction and ore beneficiation, while midstream processing stages remain outside the scope of the law. The question was also raised as to whether midstream processing of lithium (or other) concentrates into hydroxides or other upgraded products could be included in a PSA. The Dobra project is seen as a pilot: it is expected to demonstrate in practice where the legislation works and where it needs to change.
At the same time, winning the Dobra tender does not mean automatic inclusion in the Fund’s portfolio. Despite the deposit frequently being mentioned as a potential Fund priority, the winner must independently submit an application and go through the standard selection process on an equal footing with other applicants.
Following the event, a number of developments have made it possible to assess the issues discussed at NYAW against actual practice. The Fund’s first investment and the postponement of the PSA reform bill have been particularly instructive.
Why the Fund’s First Investment Came as a Surprise – and What It Means for Applicants
One of the most significant events of the Agreement’s first year was the Fund’s first investment.
In March 2026, the Board of Directors approved an investment in Sine Engineering – a Ukrainian company developing radio communication control systems for unmanned aerial vehicles.
Contrary to expectations, the Fund’s first investment was not in the gas sector, nor in critical minerals or any other natural resource.
This was, in effect, the first practical confirmation that the Fund’s mandate is considerably broader than the text of the Agreement alone would suggest.
The Agreement’s preamble sets out the overarching objective: to create conditions for increasing investment in mineral extraction, energy, and related technologies. The body of the Agreement similarly emphasises projects in the minerals and infrastructure space. Furthermore, subsoil users are required to notify the Fund of their intention to raise investment and to report potential opportunities to offtake extracted minerals. The procedure and timelines for fulfilling these obligations are set out in the new model subsoil use agreements approved by Order No. 3053 of the Ministry of Economy, Environment and Agriculture of Ukraine, dated 12 December 2025.
The Fund’s official website, however, presents a considerably broader picture: the priority sectors listed are critical minerals, energy, ICT, transport and logistics, and strategic and emerging technologies.
Even wider scope is suggested by the investment proposal portal. When registering an application, the system prompts the user to select the company’s sector of activity using NAICS codes (the standard U.S. industrial classification). The list of available categories is extensive – ranging from natural gas extraction to agricultural production. In addition, when selecting the project’s own sector, alongside the five main priority areas, there is a separate “other” category.
The document that could resolve questions about the Fund’s specific investment priorities – the Limited Partnership Agreement, which is explicitly referenced in the Agreement – is the instrument intended to define the Fund’s investment mandate, governance, and operational parameters. That document has not been made public; nor have the investment protocols approved in December 2025.
In practice, the Fund’s investment mandate appears broader than what follows directly from the text of the Agreement. Eligible investments may include projects that contribute to Ukraine’s reconstruction and align with U.S. strategic interests.
For subsoil users hoping to attract capital through the Fund, the broader list of priorities means greater competition for a limited pool of investment. For companies in other sectors, it is a signal that they too may be eligible for Fund financing.
Reform of the Production Sharing Agreement Regime
A further key question is the updating of Ukraine’s Law on Production Sharing Agreements to meet the needs of projects involving the extraction of minerals other than hydrocarbons.
The need for amendments to the PSA Law has been apparent for some time, but gained particular urgency once it was decided to offer a number of deposits of lithium ore, titanium ore, and other non-hydrocarbon minerals under PSA arrangements. The current list includes 26 subsoil plots.
All previous PSAs in Ukraine were concluded in respect of oil and gas deposits, and the PSA Law itself was developed with hydrocarbon projects in mind. The extraction of metallic and other solid minerals involves, among other things, a different production cycle structure.
The government acknowledges the need to update the legislation. The Government’s Plan of Priority Actions for 2025, approved by Cabinet Order No. 1003-r of 10 September 2025, envisaged a reform of the PSA mechanism. The Ministry of Economy was tasked with preparing and submitting to the Cabinet of Ministers a draft law on the PSA framework for non-hydrocarbon subsoil plots by December 2025. This did not happen: Cabinet Order No. 306-r of 30 March 2026 extended the deadline to July 2026.
In the meantime, on 12 January 2026, the Cabinet of Ministers named the winner of Ukraine’s first-ever PSA tender for metallic minerals – Dobra Lithium Holdings JV, LLC. Under the PSA Law, the parties have a maximum of 12 months from the publication of the tender results to conclude the agreement (extendable to a maximum of 18 months). The agreement can therefore be expected to be concluded around early 2027.
The terms of the tender and public statements by government officials indicate that the PSA is intended to cover not only extraction but also ore beneficiation. At the same time, statements from government representatives suggest that the investor is expected to carry out further chemical processing – including the production of lithium carbonate or lithium hydroxide. This aligns with Ukraine’s policy of developing CRM clusters.
During the NYAW discussions on the Dobra project, government representatives noted that the existing legislation covers extraction and beneficiation, but does not provide a clear answer as to whether midstream processing stages – such as the production of lithium carbonate or hydroxide – can be included in a PSA. Different interpretations exist as to the permissible scope of processing within a PSA framework.
This gives rise to the key practical question for the investor: can the state provide adequate legal stability when the regulatory framework for such projects continues to evolve? A second question is whether sufficient legal mechanisms exist to support the development of supply chains and midstream processing in Ukraine.
Government representatives indicated that the Dobra project can be implemented within the existing legal framework, and that the project’s implementation will itself reveal where the legislation works and where it requires amendment.
The need for legislative reform is relevant not only for the Dobra project, but for all future non-hydrocarbon PSAs. According to the list of subsoil plots of strategic and/or critical importance earmarked for PSA tender, 25 further plots remain in the potential pipeline after Dobra.
Conclusions
The first year of the Minerals Agreement’s implementation has confirmed that the initiative is moving quickly and is already having a tangible impact on the market.
- The Fund has reached operational readiness, launched its application portal, and made its first investment decision – the mechanism is operating at a practical pace, not merely at the level of declarations.
- The first investment in a technology project (Sine Engineering) signals a broader investment mandate for the Fund and, accordingly, greater competition among applicants for a limited resource.
- For business, the key remaining issue is transparency around selection criteria: the Limited Partnership Agreement and the investment protocols have not been made public, making it difficult to predict application priorities.
- Changes to the PPP and concession framework have already created a more flexible structure for infrastructure projects; by contrast, for non-hydrocarbon PSAs, the legal framework is still “catching up” with practical expectations – particularly in relation to processing and value chain development.
- The postponement of the PSA reform bill increases regulatory risk for investors in solid minerals projects and places greater weight on contractual stabilisation and risk-allocation provisions.
The review was prepared in collaboration with K&L Gates LLP.
Authors:
Oleg Alyoshin, partner, Vasil Kisil and Partners
Yulia Adamovych, senior associate, Vasil Kisil and Partners
Maria Kostytska, partner, K&L Gates LLP
Dariia Mokhnachova, associate, K&L Gates LLP
Published in Yurydychna Gazeta, May 13, 2026.