Latest news with #USInternationalDevelopmentFinanceCorporation
Yahoo
13-06-2025
- Business
- Yahoo
Former US envoy for Ukraine Volker: Minerals deal won't bring Ukraine money soon but will shift rhetoric in US
Former US Special Envoy for Ukraine Kurt Volker has said that the newly signed Ukraine-US agreement on cooperation in the field of minerals and natural resources will not yield immediate financial results but plays an important political role. Source: Volker on 13 June during the GLOBSEC-2025 forum in Czechia Details: Volker recalled that the agreement involves the creation of a Recovery Fund, which is expected to receive revenues from future natural resource extraction licences in Ukraine. However, he noted that "the reality is: nothing will go into this fund... for years and years". Instead, he explained that the main purpose of the deal is to shift the narrative in the US – moving away from portraying Ukraine as a charity case and towards a vision in which it can "repay" the aid and provide compensation in the future. Volker stated that "the Biden administration has been spending taxpayers' money limitlessly and having no strategy". Meanwhile, now, he added, there is a strategy, and "a way Ukraine can pay them [the US – ed.] back". He stressed that any financial return from this initiative would only be possible after the war ends and following years of investment in the extraction sector. Commenting on the investment outlook, Volker stated that large parts of Ukraine remain safe for business and that many of the barriers to investors stem not from the war but from the country's business climate. Volker said that it is necessary to clearly identify what is hindering economic development and remove these obstacles. Background: On 8 May, Ukraine's parliament ratified the so-called minerals agreement with the US and approved the creation of a joint Ukrainian-American reconstruction investment fund. President Volodymyr Zelenskyy signed the law on 12 May. On 13 May, Ukraine signed two commercial agreements with the US International Development Finance Corporation as part of the implementation of the ratified investment fund deal. On 4 June, Ukraine's parliament approved amendments to the Budget Code to enable the implementation of the US-Ukraine mineral resources agreement. Support Ukrainska Pravda on Patreon!
Business Times
25-05-2025
- Business
- Business Times
US climate pullback threatens planned debt-for-nature deals
BILLIONS of dollars of debt deals aimed at protecting vital ecosystems from Africa to Latin America are at risk of unravelling or may need reworking amid concerns that crucial US backing is about to dry up under President Donald Trump. The 'debt-for-nature' swaps, which reduce a country's debt in return for conservation commitments, have gained traction in recent years with deals involving the Galapagos Islands, coral reefs and the Amazon rainforest among the most prominent. The US International Development Finance Corporation (DFC) has been a key player, providing political risk insurance for over half of the deals done over the last five years, accounting for nearly 90 per cent of US$6 billion of swapped debt. A source with direct knowledge of the plans said the DFC had about five swaps in the pipeline which are now in question, with CEO-in-waiting Ben Black and US government efficiency chief Elon Musk both criticising its climate work. The source did not specify how much debt was covered by the swaps but pointed out that the last few DFC-backed deals involved over US$1 billion each. Spokespeople for the White House and the DFC did not respond to requests for comment on future DFC involvement in such deals. A NEWSLETTER FOR YOU Friday, 12.30 pm ESG Insights An exclusive weekly report on the latest environmental, social and governance issues. Sign Up Sign Up A DFC official who spoke on condition of anonymity confirmed to Reuters it stepped down earlier this year as co-chair of a global task force set up in 2023 to expand the use of debt swaps. US Treasury Secretary Scott Bessent has also hit out at multilateral lenders for climate change work amid a broader US retreat that has seen it withdraw from the Paris Agreement to curb global warming. Angola and Zambia, and at least one Latin American country, are among those whose 'debt-for-nature' swap plans risk needing to be reworked or even abandoned due to DFC uncertainty, four sources that have been directly involved in the projects said. Angolan Finance Minister Vera Daves de Sousa said her country, which is one of the most indebted in Africa and whose rivers feed the Okavango basin vital for endangered elephants and lions, has been talking to the DFC about two potential swaps. One is a debt-for-nature deal, the other a broader 'debt-for-development' swap tied to education and young people. 'We feel openness from them (DFC), but especially on the debt-for-development swap,' de Sousa recently told Reuters. 'We respect their vision,' she added. 'For us, there is no difference – we have opportunities on the development side, and we have opportunities on the nature side.' New reality Generating money for conservation by exchanging costly government bonds for cheaper ones is seen as an obvious choice for smaller nations grappling with heavy debt loads and climate change pressures. UK-based non-profit, International Institute for Environment and Development, estimates that the world's 49 poorest countries seen most at risk of debt crises could swap a quarter of the over US$430 billion they now owe. Given the signals coming from Washington, those that do should drop hopes of DFC support and look at alternatives, said White Advisory managing director Sebastian Espinosa, who has advised Barbados, Belize and Seychelles on such swaps. Those could include credit guarantees from major multilateral development banks, potentially alongside private sector insurers and guarantors, as pioneered by the Bahamas last year. Historically, though, DFC backing has been crucial in scaling up deals, offering up to US$1 billion in political risk insurance. That protects those who buy the new lower-cost bonds if the governments involved fail to make payments. The Inter-American Development Bank, involved in five of the last nine debt-for-nature swaps – sometimes alongside the DFC – declined to comment on whether any of its plans were being affected. Investment firm Nuveen's Stephen Liberatore, who has been a cornerstone investor in some debt swaps, said while substitutes for the DFC could be found, the knock-on effects were yet to be seen. 'What is the price for a private entity (to provide risk insurance) versus a public entity like the DFC?' Liberatore said. 'Does it change the amount of savings (which are then spent on conservation)? That's the ultimate question.' REUTERS
Yahoo
23-05-2025
- Business
- Yahoo
Ukraine and US launch Reconstruction Fund under minerals deal
Yulia Svyrydenko, Ukraine's Deputy Prime Minister and Minister of Economy, announced the completion of all procedures for the launch of the US-Ukraine Reconstruction Fund. Source: Yulia Svyrydenko on X (Twitter), as reported by European Pravda Details: Svyrydenko confirmed the final step, a diplomatic note from the United States, which she received on Friday morning from US Chargé d'Affaires Julie S. Davis. "The fund is now officially launched," Svyrydenko said. She noted that the agreement establishes a true partnership based on equality, respect for Ukraine's national interests and joint management with the United States. "The Fund is a symbol of long-term strategic commitment. Together, Ukraine and the United States will invest in the recovery and growth of our country – on terms that protect our sovereignty and empower our future," Svyrydenko wrote. Background: On 8 May, the Verkhovna Rada (Ukrainian Parliament) voted to ratify the agreement on establishing a joint investment fund between Ukraine and the United States. All 338 MPs voted in favour, with none of them abstaining or voting against ratification. On 13 May, Ukraine signed two commercial agreements with the US International Development Finance Corporation to advance the ratified agreement on the fund's creation. Support Ukrainska Pravda on Patreon!
AsiaOne
23-05-2025
- Business
- AsiaOne
US climate pullback threatens planned debt-for-nature deals, Money News
LONDON — Billions of dollars of debt deals aimed at protecting vital ecosystems from Africa to Latin America are at risk of unravelling or may need reworking amid concerns that crucial US backing is about to dry up under President Donald Trump. The 'debt-for-nature' swaps, which reduce a country's debt in return for conservation commitments, have gained traction in recent years with deals involving the Galapagos Islands, coral reefs and the Amazon rainforest among the most prominent. The US International Development Finance Corporation (DFC) has been a key player, providing political risk insurance for over half of the deals done over the last five years, accounting for nearly 90 per cent of US$6 billion (S$8 billion) of swapped debt. A source with direct knowledge of the plans said the DFC had about five swaps in the pipeline which are now in question with CEO-in-waiting Ben Black and US government efficiency chief Elon Musk both criticising its climate work. The source did not specify how much debt was covered by the swaps but pointed out that the last few DFC-backed deals involved over US$1 billion each. Spokespeople for the White House and the DFC did not respond to requests for comment on future DFC involvement in such deals. A DFC official who spoke on condition of anonymity confirmed to Reuters it stepped down earlier this year as co-chair of a global task force set up in 2023 to expand the use of debt swaps. US Treasury Secretary Scott Bessent has also hit out at multilateral lenders for climate change work amid a broader US retreat that has seen it withdraw from the Paris Agreement to curb global warming. Angola and Zambia and at least one Latin American country are among those whose 'debt-for-nature' swap plans risk needing to be reworked or even abandoned due to DFC uncertainty, four sources that have been directly involved in the projects said. Angolan Finance Minister Vera Daves de Sousa said her country, which is one of the most indebted in Africa and whose rivers feed the Okavango basin vital for endangered elephants and lions, has been talking to the DFC about two potential swaps. One is a debt-for-nature deal, the other a broader 'debt-for-development' swap tied to education and young people. "We feel openness from them (DFC), but especially on the debt-for-development swap," de Sousa recently told Reuters. "We respect their vision," she added. "For us there is no difference — we have opportunities on the development side, and we have opportunities on the nature side." In Zambia, which late last year was looking closely at a swap linked to its vast national parks that are home to over 40 per cent of Africa's elephants, things have changed too. "We are not completely shutting (the swap) down but we are not actively at it right now," its Finance Minister Situmbeko Musokotwane told Reuters, declining to specify the reason for the shift. New reality Generating money for conservation by exchanging costly government bonds for cheaper ones is seen as an obvious choice for smaller nations grappling with heavy debt loads and climate change pressures. The UK-based, non-profit International Institute for Environment and Development estimates that the world's 49 poorest countries seen most at risk of debt crises could swap a quarter of the over US$430 billion they now owe. Given the signals coming from Washington, those that do should drop hopes of DFC support and look at alternatives, said White Advisory managing director Sebastian Espinosa, who has advised Barbados, Belize and Seychelles on such swaps. Those could include credit guarantees from major multilateral development banks, potentially alongside private sector insurers and guarantors, as pioneered by the Bahamas last year. Historically, though, DFC backing has been crucial in scaling up deals, offering up to US$1 billion in political risk insurance. That protects those who buy the new lower-cost bonds if the governments involved fail to make payments. "Who's going to step in? (to replace DFC) I don't know," said Eva Mayerhofer at the European Investment Bank, which backed a 2024 Barbados swap. "We won't be able to do debt conversions that regularly." The Inter-American Development Bank, involved in five of the last nine debt-for-nature swaps, sometimes alongside the DFC —declined to comment on whether any of its plans were being affected. Investment firm Nuveen's Stephen Liberatore, who has been a cornerstone investor in some debt swaps, said while substitutes for the DFC could be found, the knock-on effects were yet to be seen. "What is the price for a private entity (to provide risk insurance) versus a public entity like the DFC?" Liberatore said. "Does it change the amount of savings?" which are then spent on conservation. "That's the ultimate question." [[nid:718025]]
Scoop
02-05-2025
- Business
- Scoop
Fantasy And Exploitation: The US-Ukraine Minerals Deal
The agreement between Washington and Kyiv to create an investment fund to search for rare earth minerals has been seen as something of a turn by the Trump administration. From hectoring and mocking the Ukrainian President Volodymyr Zelensky before the cameras on his visit to the US capital two months ago, President Donald Trump had apparently softened. It was easy to forget that the minerals deal was already on the negotiating table and would have been reached but for Zelensky's fateful and ill-tempered ambush. Dreams of accessing Ukrainian reserves of such elements as graphite, titanium and lithium were never going to dissipate. Details remain somewhat sketchy, but the agreement supposedly sets out a sharing of revenues in a manner satisfactory to the parties while floating, if only tentatively, the prospect of renewed military assistance. That assistance, however, would count as US investment in the fund. According to the White House, the US Treasury Department and US International Development Finance Corporation will work with Kyiv 'to finalize governance and advance this important partnership', one that ensures the US 'an economic stake in securing a free, peaceful, and sovereign future for Ukraine.' In its current form, the agreement supposedly leaves it to Ukraine to determine what to extract in terms of the minerals and where this extraction is to take place. A statement from the US Treasury Department also declared that, 'No state or person who financed or supplied the Russian war machine will be allowed to benefit from the reconstruction of Ukraine.' Ukraine's Minister of Economy, Yulia Svyrydenko, stated that the subsoil remained within the domain of Kyiv's ownership, while the fund would be 'structured' on an equal basis 'jointly managed by Ukraine and the United States' and financed by 'new licenses in the field of critical materials, oil and gas – generated after the Fund is created'. Neither party would 'hold a dominant vote – a reflection of equal partnership between our two nations.' The minister also revealed that privatisation processes and managing state-owned companies would not be altered by the arrangements. 'Companies such as Ukrnafta and Energoatom will stay in state ownership.' There would also be no question of debt obligations owed by Kyiv to Washington. That this remains a 'joint' venture is always bound to raise some suspicions, and nothing can conceal the predatory nature of an arrangement that permits US corporations and firms access to the critical resources of another country. For his part, Trump fantasised in a phone call to a town hall on the NewsNation network that the latest venture would yield 'much more in theory than the $350 billion' worth of aid he insists the Biden administration furnished Kyiv with. Svyrydenko chose to see the Reconstruction Investment Fund as one that would 'attract global investment into our country' while still maintaining Ukrainian autonomy. Representative Gregory Meeks, the ranking Democrat on the House of Foreign Affairs Committee, thought otherwise, calling it 'Donald Trump's extortion of Ukraine deal'. Instead of focusing on the large, rather belligerent fly in the ointment – Russian President Vladimir Putin – the US president had 'demonstrated nothing but weakness' towards Moscow. The war mongering wing of the Democrats were also in full throated voice. To make such arrangements in the absence of assured military support to Kyiv made the measure vacuous. 'Right now,' Democratic Senator Chris Murphy said on MSNBC television, 'all indications are that Donald Trump's policy is to hand Ukraine to Vladimir Putin, and in that case, this agreement isn't worth the paper that it's written on.' On a certain level, Murphy has a point. Trump's firmness in holding to the bargain is often capricious. In September 2017, he reached an agreement with the then Afghan president Ashraf Ghani to permit US companies to develop Afghanistan's rare earth minerals. Having spent 16 years in Afghanistan up to that point, ways of recouping some of the costs of Washington's involvement were being considered. It was agreed, went a White House statement sounding all too familiar, 'that such initiatives would help American companies develop minerals critical to national security while growing Afghanistan's economy and creating new jobs in both countries, therefore defraying some of the costs of United States assistance as Afghans become more reliant.' Ghani's precarious puppet regime was ultimately sidelined in favour of direct negotiations with the Taliban that eventually culminated in their return to power, leaving the way open for US withdrawal and a termination of any grand plans for mineral extraction. A coterie of foreign policy analysts abounded with glowing statements at this supposedly impressive feat of Ukrainian diplomacy. Shelby Magid, deputy director of the Atlantic Council think tank's Eurasia Centre, thought it put Kyiv 'in their strongest position yet with Washington since Trump took office'. Ukraine had withstood 'tremendous pressure' to accept poorer proposals, showing 'that it is not just a junior partner that has to roll over and accept a bad deal'. Time and logistics remain significant obstacles to the realisation of the agreement. As Ukraine's former minister of economic development and current head of Kyiv school of economics Tymofiy Mylovanov told the BBC, 'These resources aren't in a port or warehouse; they must be developed.' Svyrydenko had to also ruefully concede that vast resources of mineral deposits existed in territory occupied by Russian forces. There are also issues with unexploded mines. Any challenge to the global rare earth elements (REEs) market, currently dominated by China (60% share of production of raw materials; 85% share of global processing output; and 90% manufacturing share of rare earth magnets), will be long in coming.
