“It's not a final document again, but another milestone": economist Pendzyn on minerals deal

He shared this during a broadcast on Espreso TV.

“This is not a final agreement again; I would say it is another interim step. At least two more agreements are still expected under this framework, which will clearly define the terms of the investment fund, the decision-making process, and so on. In other words, this agreement slightly specifies the memorandum of intent signed by Deputy Prime Minister Yuliia Svyrydenko, but it doesn’t answer many questions. Nevertheless, we have a signed agreement: there are positives, and there are also some ambiguities. The first positive is that, based on the text, no debt was acknowledged — it’s about future investments,” Pendzyn commented.

According to him, another positive aspect is that the income from this fund for the Ukrainian side comes from royalties of future licenses and extractions. That means everything currently operating and contributing royalties to the state budget is not included.

“To be honest, there is something I didn’t like. It’s clearly stated how Ukraine is to fund its share of the fund — money from royalty payments goes into a special fund, from which 50% goes into this investment fund. But how will the Americans fund their share? After all, the fund is supposed to be 50/50. The agreement mentions that in the case of additional military-technical contributions from the U.S., these will count towards the fund. Where will these contributions come from? As of now, the U.S. budget does not even mention Ukraine or any funds that could theoretically be allocated to it. Accordingly, for this fund to operate fully, the American side must contribute its share jointly. But the source of this funding is still unclear,” the economist noted.

In his opinion, this signed agreement should be seen as a next step for now. It is not the final version — it might have been something the U.S. President needed to show American voters some results within 100 days. That the supposed $350 billion once promised to Ukraine will be returned, or even more. But this looks more like a PR move, because it is still unclear where this hypothetical $350 billion would come from.

“I’d like to remind you that the main stumbling block that prevented previous agreements from being signed was the lack of security guarantees. And this document doesn’t contain them either. Therefore, this agreement is a kind of presentational economic document, which, in my opinion, under the current economic and wartime conditions, cannot be implemented — no investor will enter while active combat operations continue in the country. This signed agreement does not carry any negative consequences for Ukraine, apart from the absence of security guarantees and a clearly defined duration of the fund. I understand that all these details are supposed to be outlined in future documents that are yet to be signed. We’ll see what is written in those,” Pendzyn concluded.

• On April 30, Ukraine and the United States signed an agreement to establish the Ukraine Reconstruction Investment Fund.