Ukraine continues to align subsoil use terms with US-Ukraine investment cooperation

On 12 December 2025, the Ministry of Economy of Ukraine approved new versions of the standard agreements on subsoil use.

The amendments update obligations of Ukrainian subsoil users implementing projects covered by the Agreement on the Establishment of a United States-Ukraine Reconstruction Investment Fund.

The following article provides an overview of the updated agreements.

1.      Scope of application

The amendments refine the scope of the subsoil use permits covered by the Agreement-related obligations.

These obligations now apply if a subsoil use permit was granted after 23 May 2025 through an auction or PSA tender and covers minerals listed in the Agreement. Previously, the obligations also applied to the permits granted outside of the competitive procedures.

As before, Agreement-related obligations will apply if:

• covered minerals were added to an existing permit after 23 May 2025 following discovery; or
• a permit granted before 23 May 2025 has resulted in material underperformance (i.e. less than 1% reserve extraction over the last ten years) or unresolved violations of the work programme for more than five years.

2.      Notification on raising capital for Projects

The amendments clarify what instances of Project financing will trigger the notification obligation of the subsoil user. Where capital is raised for the Project, the subsoil user must submit a notice to Ukraine’s Agency on Support Public-Private Partnership (PPP Agency) on the potential investment opportunity for the Fund.

In particular, “capital raising” is now understood as financing of the Cover Project by the subsoil user, in whole or in part, through:

• borrowed funds (e.g. loans, credit facilities or other funds attracted on the basis of repayment, remuneration and maturity);
• raised financial funds (i.e. funds obtained from the sale of shares, participatory interests in the charter capital of, or other civil-law objects of participation in, this subsoil user).

At the same time, financing of the Projects within a group of related companies will not be considered as capital raising as far as the Fund is concerned.

3.      Fund participation and standstill

The amendments simplify interaction with the subsoil user when the Fund considers participation in the Project. The Ministry of Economy of Ukraine and the PPP Agency will notify the subsoil user on the Fund’s decision. Previously, the Fund issued the notice to the subsoil user.

As before, the subsoil user will be obliged to conduct good-faith negotiations without granting the Fund any commercial advantages.

At the same time, the amendments shorten the standstill period for the subsoil user to refrain from accepting third-party offers for the Covered Project. This deadline is now three months after submitting the project investment information to the PPP Agency or until the Fund’s participation refusal (or whichever is earlier). Previously, the deadline was six months after submitting the project investment information or the Fund’s participation refusal date (whichever is earlier).

4.      Notification on offtake opportunities

The amendments introduces a few changes to the subsoil user’s interaction with the US International Development Finance Corporation (DFC) on offtake opportunities. If the subsoil user seeks offtakers for extracted minerals, it must simultaneously submit a notice to the PPP Agency and the DFC on the potential offtake opportunity (Offtake Notice). The DFC has up to six months following the Offtake Notice date to exercise its right to enter into negotiations.

Within this six-month period, the subsoils user is allowed to conclude sale and purchase agreements with third parties if the agreed commercial terms are not materially better than the ones offered to the DFC. The obligation to refrain from offering materially better terms to other offtakers within six months remains.

The Offtake Notice should not be submitted for natural gas if the subsoil user is subject to special public service obligations during the period of performance of these special obligations and within their scope. 

5.      Conclusion

The amendments further align the subsoil-use terms with the Fund framework, formally embedding the agreed mechanisms into binding contractual terms. They are expected to enhance regulatory clarity and investor confidence, while supporting the launch of large-scale projects in energy, infrastructure and critical minerals as part of the long-term recovery and modernisation of Ukraine.

For more information, contact your CMS client partner or the CMS experts who wrote this article: Vitalii Radchenko, Maryna Ilchuk, Yuliia Pidlisna, and Maksym Zhurakovskyi.