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UK to work with EBRD on war risk insurance project in Ukraine

02 Nov, 2023
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UK to work with EBRD on war risk insurance project in Ukraine

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The United Kingdom will join the development and implementation by the European Bank for Reconstruction and Development of a pilot project of war risk insurance in Ukraine. A statement of intent was signed between the UK Government and the EBRD on 31 October 2023.

“The cooperation of such strong and reliable partners of our country as the UK Government and the EBRD gives us confidence in the success of the project launched during the Recovery Conference in London. The progress in the development and practical content of this project, in the implementation and strengthening of other war risk insurance projects launched by governments, international financial institutions and insurance companies, shows that our partners understand the critical importance of this area in the context of Ukraine’s recovery. Indeed, it is private capital that will bear the brunt of the recovery. And to ensure that investment comes to Ukraine on the scale required, we need to work together to ensure the security of investment, trade operations, etc.”, said Yuliia Svyrydenko, First Deputy Prime Minister and Minister of Economy of Ukraine.

The EBRD project envisages the creation of a new fund to facilitate the development of an international market for the reinsurance and insurance of property and trade risks, including the insurance of goods in transit or in storage. The statement of intent signed between the EBRD and the UK Government demonstrates the UK’s support for the continued technical and administrative development of the EBRD project. The UK will also contribute to the international interest in the project through its status as a world leader in insurance.

“Investment risk insurance plays a key role in creating a favourable investment environment, thus attracting private capital and supporting long-term reconstruction projects. This is especially important for Ukraine to be open to investors who are considering entering our country even today, while we are at war,” said Deputy Minister of Economy Volodymyr Kuzio in his speech at a roundtable organised by the EBRD, which preceded the signing of the letter of intent.

As a reminder, the Government of Ukraine’s cooperation with partners in the field of war risk insurance is already yielding practical results. For example, the Multilateral Investment Guarantee Agency (MIGA), a member of the World Bank Group, recently approved a ten-year insurance package for an industrial park project in Lviv region, and the U.S. International Development Finance Corporation (DFC) is actively involved in providing political risk insurance, with numerous applications totalling hundreds of millions of dollars currently under consideration. Partner countries’ export credit agencies are establishing and expanding guarantee programmes to support companies doing business in Ukraine. This sends a strong message to the international investment community that Ukraine is open for business.

At the Recovery Conference in London in June this year, the UK announced an increase in funding for MIGA to GBP 20 million. The funds will help UK investors reduce the risks of investing in Ukraine’s reconstruction projects.

The Odessa Journal

The Odessa Journal

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