War and political risk insurance is an important element in creating an appropriate investment climate to attract private capital and support for long-term projects to restore Ukraine. For example, insurance projects from the US Development Finance Corporation, which are already in the final stages of preparation, will send a positive signal to potential investors. It is important that the DFC mandate includes insurance for both American and other foreign and Ukrainian investors.
This opinion was expressed by Deputy Minister of Economy of Ukraine Volodymyr Kuzio during a webinar for business on political risk insurance provided by the US Corporation to Finance International Development (DFC). The event was organised by the USAID Project "Reforming the Financial Sector in Ukraine" in partnership with the American Chamber of Commerce in Ukraine.
"The scaling of insurance programs is being discussed with our American colleagues. At recent meetings, we discussed the status of projects under development and the new ones. The international community understands that the volume of support for Ukrainian business should increase, and new programmes should complement the existing ones. Therefore, we welcome the advisory group between DFC and MIGA, which strengthens and coordinates efforts to expand the war risk insurance mechanism in Ukraine," the Deputy Minister said.
For example, Managing Director of Political Risk Insurance and Reinsurance at DFC, Dr Marlena Hurley, told the entrepreneurs who took part in the webinar about the role of political risk insurance in attracting investment in a high-risk environment. There were also a presentation of DFC's active programmes for Ukraine, investor requirements and project submission requirements, successful cases, application process, and answers to practical questions from the members of the American Chamber of Commerce.
It is worth noting that the Ministry of Economy expects to implement 7 war risk insurance projects by the end of 2023: three projects from MIGA and four from DFC, including insurance of such war-related investment risks as political, currency inconvertibility and expropriation.
In addition, the national Export Credit Agencies (ECAs) of Japan, Germany, France, Italy, Sweden, and the United Kingdom have already announced investment risk insurance for their residents. The Polish export credit agency KUKE also offers both international and Ukrainian investors trade, property and investment risk insurance.