The Ukrainian Parliament has passed a law on the insurance of investments against the risks of war

This will allow the Export Credit Agency (ECA) to insure and reinsure investments of both international and Ukrainian companies before the end of martial law. This will include insurance of investments in export-oriented enterprises. The law will help attract domestic investors and support the Ukrainian economy. 

In particular, the law expands the capabilities of the ECA, allowing it to insure and reinsure direct investments, including insurance of investments in Ukraine against risks that may be caused by armed aggression, hostilities and/or terrorism.

According to the document, such insurance will be provided only if the investments are aimed at the creation of facilities and infrastructure necessary for the development of manufacturing industry and the export of goods (works, services) of Ukrainian origin.

Today, various types of war risk insurance for international private investors are offered by the national export credit agencies of these countries. Individual war risk insurance is also offered by specialised organisations such as the US-based Development Finance Corporation (DFC), which is also prepared to insure Ukrainian investments, or the Multilateral Investment Guarantee Agency (MIGA), a division of the World Bank Group. In addition, the government expects the European Bank for Reconstruction and Development to set up a property risk insurance fund. 

At the same time, the domestic ECA has been legally deprived of the ability to provide domestic investment insurance services. According to the State Statistics Service of Ukraine, 69% of all capital investments in 2021 were made at the expense of companies’ and organisations’ own funds. 

The Ministry of Economy of Ukraine expects the initiative to stimulate investment lending during the war. The National Bank of Ukraine has already included ECA insurance in the list of acceptable loan collateral. To this end, the Ministry plans to increase the financial capacity of the ECA.

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