Ukraine starts insuring investors against military, political risks - Economy Ministry

MOSCOW. May 30 (Interfax) - Ukraine's Export Credit Agency (ECA) starts accepting applications for investment insurance against military and political risks, Ukrainian media said, citing the Economy Ministry website.

"This could serve as an additional incentive for investors to enter the Ukrainian market and develop their export-oriented plants and factories here," the statement quoted Economy Minister Yulia Sviridenko as saying.

ECA will offer two insurance products, such as direct investment insurance for investors and investment credit insurance for banks, the statement said.

As reported, the ECA Supervisory Board approved agency products to insure investments against military and political risks at the end of May.

In order to qualify for ECA insurance, the share of corporate rights of the investor (resident or non-resident of Ukraine, whether an individual or a legal entity) must exceed 10%. It also has to aim to build facilities and infrastructure for processing industry development and exports of goods (works, services) of Ukrainian origin. The maximum coverage is 200 million hryvni. The insurance rate is determined for each contract individually. It ranges from 0.49% to 8.05%.

In addition, ECA insurance coverage applies to investment loans, in particular, on condition that a loan to a Ukrainian business is associated with investments in facilities and infrastructure for processing industry development and export of goods (works, services) of Ukrainian origin that meet the conditions defined by the insurance contract, internal documents of the insurer and legislation. Goods (work, services) exported as a result of the investment must comply with Article 8 of the Law on Financial Mechanisms for Stimulating Exports.

Insurance coverage is specified by the terms of the loan agreement, with due account of Ukrainian laws, and may reach 100% of the debt limit or principal debt. Insurance coverage is provided in the currency of the investment loan. The maximum amount is 200 million hryvni.

The insurance rate is determined for each contract individually. It ranges from 0.95% to 84.05%.

The indemnities are paid in hryvnia at the official exchange rate set by National Bank of Ukraine on the payment date within five working days from the date ECA makes the relevant decision.

The Export Credit Agency aims to stimulate exports of goods (work, services) of Ukrainian origin and to support domestic exporters through insurance, reinsurance and export contract guarantees. The sole founder and shareholder of ECA is the state represented by the government. The government manages corporate rights of the state in the ECA charter capital through the designated management body, the Economy Ministry.

The National Bank of Ukraine was vested with the power to regulate ECA operations since January 7, 2023.