MIGA Expands Insurance Support to Ukraine
BERLIN, June 11, 2024 – The Multilateral Investment Guarantee Agency of the World Bank Group (MIGA) signed a memorandum of understanding with KUKE, the official export credit agency of Poland, to support and encourage trade and foreign direct investments by Polish companies in Ukraine and other countries. The agreement, signed at the Ukraine Recovery Conference 2024, provides a framework for cooperation on projects through joint insurance, parallel insurance, and reinsurance arrangements. This agreement reflects Poland’s strong desire to support Ukraine’s reconstruction and MIGA’s strategy of partnering with public sector insurers given the lack of private market insurance for war risks.
The cooperation builds on the 2023 Ukraine Recovery Conference in London, where the U.S. International Development Finance Corporation (DFC) and MIGA agreed to collaborate on insuring projects in Ukraine. Since then, DFC and MIGA have partnered to co-insure a manufacturing project in Ukraine, each entity covering approximately $25 million against political risks, including war risks. MIGA and DFC have agreed to provide coverage for 15 years.
"During this time of immense difficulty caused by Russia’s invasion of Ukraine, we remain committed to expanding our support to the Ukrainian government and the private sector," said Hiroshi Matano, MIGA Executive Vice President. "Our insurance and reinsurance products have played a vital role in sustaining the Ukrainian economy’s resilience during the ongoing war and supporting much needed foreign investment."
MIGA is also exploring reinsurance support for Ukrainian projects with other European export credit agencies. The Agency has been collaborating with the Ukrainian government, development partners, and the international investment community interested in risk mitigation and market insights.
"The combination of our capabilities will strengthen the shield against political and war risk available to not only Polish companies but also entities using Poland as a hub for establishing or expanding their business in Ukraine," said Katarzyna Kowalska, Vice President and CRO, KUKE.
MIGA has been among very few providers of political risk insurance in Ukraine, including cover for war and civil disturbance, issuing more than $215 million in coverage since the Russian invasion of Ukraine in February 2022. MIGA’s coverage was made possible by donor contributions to the Support for Ukraine Reconstruction and Economy Trust Fund (SURE TF) which complements MIGA’s own risk capacity. Through these efforts, MIGA has supported new and existing cross-border investors in Ukraine. MIGA’s guarantees serve as a key risk mitigation tool, ensuring the continuity of private sector operations and investments for the country’s continued economic activity during the ongoing conflict.
About MIGA
MIGA was created in 1988 as a member of the World Bank Group to promote foreign direct investment in emerging economies by helping to mitigate the risks of restrictions on currency conversion and transfer, breach of contract by governments, expropriation, and war and civil disturbance; and offering credit enhancement to private investors and lenders. Since its creation, MIGA has issued over $81 billion in guarantees across 123 developing countries, supporting more than 1,000 projects. Over the past decade, MIGA’s guarantees have helped provide new or improved electricity services to more than 78 million people.
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