First insurance projects against war, political risks starts to be implemented in Ukraine – Svyrydenko
The first insurance projects against war and political risks have already begun to be implemented in Ukraine thanks to cooperation with international financial organizations and national export credit agencies of partner countries, First Deputy Prime Minister - Minister of Economy of Ukraine Yulia Svyrydenko reported, according to the ministry's website.
In her column for the American think tank Atlantic Council, she indicated that the World Bank's multilateral investment guarantee agency, MIGA, had issued a policy to a company specializing in commercial real estate investments in Ukraine.
At the same time, it is clarified that the company is investing in the construction of an industrial park in Lviv M10 on an area of 140,000 square meters, occupying six sites for production and warehouse premises and providing 3,000 new jobs. The company received guarantees against the risks of war and civil unrest for 10 years in the amount of up to $9.1 million. Of this, $4 million is provided by donor countries of the Support to Ukraine's Reconstruction and Economy (SURE Trust Fund) managed by MIGA.
National export credit agencies (ECAs) also make their contribution to the introduction of war-political risk insurance. Thus, the Polish export credit insurance corporation KUKE will insure investors who are interested in the restoration of Ukraine. For more than a year, KUKE was the only insurance organization in the EU that provided guarantees for the sale of goods to Ukraine. Thanks to this, last year exports from Poland to Ukraine increased by almost 55%.
"We see active work in the area of war risk insurance on the part of the American International Development Finance Corporation (DFC), which is also ready to consider insurance of investments of Ukrainian investors. They are currently working on several applications for insurance of Ukrainian projects worth about $200 million. The governments of the G7, G19 countries, the European Commission, the World Bank and export credit agencies of other countries are also ready to provide support in the field of insurance of investments against war risks in Ukraine," the First Deputy Prime Minister notes.
According to Svyrydenko, export credit agencies of Germany, France, Italy, Great Britain, Sweden and Japan have already confirmed their participation in political risk insurance for the work of their companies in Ukraine.
Recently, the German federal government decided to provide Ukraine with export credit guarantees, also known as Hermes Cover. This expands coverage and supports exporters working with Ukraine. Also, the French state insurance company Bpifrance Assurance Export announced that it would insure French companies that are ready to invest in Ukraine and actively participate in the reconstruction of the country, without waiting for the end of the war.
In addition, the European Bank for Reconstruction and Development (EBRD) is working to establish a fund and attract donor funding to it. "The creation of the fund will help activate the local insurance market for covering property and trade risks, and we hope that it will be operational by the end of 2023," the Minister of Economy said.
She also indicated that for the domestic market, Ukraine plans to expand the powers of its own export credit agency by adopting a bill that would allow the ECA to insure businesses not only against economic risks, but also against risks associated with military operations or other crimes of Russia.