• Українською
  • War risk insurance mechanisms should be launched to attract investors to Ukraine: Yuliia Svyrydenko in Brussels
    Ministry of Economy of Ukraine, posted 23 February 2023 12:02

    Ukraine seeks to encourage private investment in its economy even before the end of the war. To do this, the country needs to introduce comprehensive war risk insurance for both foreign and domestic entrepreneurs. This was discussed during a meeting in Brussels between the First Deputy Prime Minister and Minister of Economy of Ukraine Yuliia Svyrydenko and Director-General of the European Commission's Directorate-General for Neighborhood and Enlargement Policy Gert Jan Koopman.

    "The Ministry of Economy places a high priority on political risk insurance for potential investments in Ukraine, including military risk insurance. This should attract private investment in the Ukrainian economy. This is a complex process that requires the participation of all stakeholders, including the G7 countries and the EU governing bodies," said Yuliia Svyrydenko.

    To make appropriate insurance products available to a wider range of applicants, Ukraine needs to create refinancing and reinsurance funds with preferential obligations to cover insurers' risks.

    "We have asked donors to include contributions to trust funds for war risk insurance in the list of potential areas for technical assistance. We have made progress with the Multilateral Investment Guarantee Agency (MIGA), which is part of the World Bank Group. They have provided an indicative proposal for a pilot project of political-military risk insurance at the expense of their authorized capital. However, they stopped processing applications due to the lack of reinsurance opportunities," explained Yuliia Svyrydenko.

    Although MIGA products can cover risks for international investors, this mechanism is not available to Ukrainian companies.

    "However, the American International Development Finance Corporation (DFC) has demonstrated a higher level of interest in insuring Ukrainian business. Unlike MIGA, they are already considering projects initiated by Ukrainian investors, but they are also limited in their capabilities and need refinancing. Other governments are also actively working in this direction. The United Kingdom is ready to cover the risks of British investors through the national Export Credit Agency UKEF, and the German Government provides risk coverage for its investors through PricewaterhouseCoopers (PWC)," added Yulia Svyrydenko.

    In conclusion, she stated that there is an opportunity to consolidate European efforts to increase support for financing military risk insurance in Ukraine. This can be done either through new mechanisms or through the existing infrastructure of the European Investment Bank (EIB) or the European Bank for Reconstruction and Development (EBRD), and involve the European Fund for Sustainable Development Plus. For faster reconstruction, Ukraine needs to introduce comprehensive war risk insurance to attract private investment in its economy.