Investors in Ukraine can now insure against military risks
MIGA started providing guarantees for war risk insurance (Photo:Ministry of Economy of Ukraine)
Investors in Ukraine are now being offered guarantees to insure against military risks, thanks to the Multilateral Investment Guarantee Agency (MIGA), Ukrainian Economy Ministry said in a message on its website on June 21.
The provision of these guarantees is facilitated through the Ukraine Relief, Recovery, Reconstruction, and Reform Trust Fund (URTF), while MIGA itself is a part of the World Bank Group.
An agreement between MIGA and ProCredit, a German banking holding company, was recently signed during the Ukraine Recovery Conference in London, according to the ministry. The agreement increases the guarantee from €17.1 million to €40.85 million ($44.74 million) and extends it to ProCredit's investments in its Ukrainian subsidiary's assets. The associated program will be in effect until December 2025.
This marks the first project to be implemented via the URTF. Minister of Economy Julia Svyrydenko expressed optimism following the signing of the deal.
“I am confident that MIGA's military risk insurance program for investments in the Ukrainian economy will greenlight those entrepreneurs who were waiting for the opportunity to start work on the restoration of our country,” said the minister.
“Private investors will be the backbone of Ukraine's post-war recovery."
MIGA anticipates that this program will give small and medium-sized businesses access to much-needed liquidity. MIGA Executive Vice President Hiroshi Matano explained, "The agricultural sector will receive funding to continue exporting grain to the global market. Furthermore, Ukrainians will have access to essential banking services."
The enhancement in MIGA guarantees by €23.75 million will enable ProCredit Ukraine to optimize its existing capital structure, continue to provide necessary banking services, and potentially generate new loans for its clients.
Earlier reports indicated that MIGA intends to offer guarantees of up to €50 million for investments by Raiffeisen Bank International AG (RBI) in its Ukrainian subsidiary. This program is part of an effort to support the country's economic recovery and growth.
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