US-Ukrainian investment fund seals first critical minerals deal

By Marc Jones

LONDON, Oct 2 (Reuters) - The joint US-Ukrainian ‌reconstruction investment fund has sealed its first critical minerals deal alongside four other new projects, one of its top US officials told Reuters.     

The fund, established as part of the minerals pact the two countries signed in April last year following a push by US President Donald Trump, is focused ​on five strategic sectors from minerals and defence to energy and infrastructure.

Conor Coleman, head of investments at the US International Development Finance Corporation (DFC), said the fund's projects now total around $70 million and showed Washington's support for Kyiv in the long-running war with Russia.

"It's absolutely imperative for the Ukrainian people that we're investing now," Coleman said in an interview, referring to the ongoing damage to Ukraine as it faces another winter.

The long-anticipated first minerals deal will inject roughly $30 million into a "joint investment platform" with BGV Group, a firm founded by Hennadii Butkevych, the billionaire co-owner of Ukraine's largest supermarket chain ATB.

Coleman said it would initially focus on early-stage mining projects across Ukraine and target rare earths, uranium, beryllium and zirconium deposits.

"They are all on the US critical minerals list, so it ties in very well with what we're looking to do from a (US) administration priority (standpoint)," Coleman said.

POWER PROJECTS

Two of the other new projects announced on Friday aim to shore up Ukraine's power and heating networks after a rise in Russian attacks on key infrastructure ahead of winter.

Coleman said one would add to the near $100 million the DFC has just agreed to lend Ukraine's largest private energy company DTEK for a new battery system that will provide backup power to approximately 600,000 Ukrainian homes for up to two hours. 

The project will also have "access to capital if damages arise".

The fund will also take an equity stake in a combined heat and power co-generation platform designed to help build and run off a number of "energy hubs" aimed at restoring damaged electricity and heat supplies to households. 

Coleman also said the fund was looking for more capital to increase its capacity.  

(Reporting by Marc Jones; Editing by Alexander Smith)