Ukraine’s new financing package includes political risk insurance for $357 million
The American International Development Finance Corporation (DFC) has announced a new financing package for Ukraine, which includes political risk insurance operations worth more than $350 million, DFC said.
DFC Director General Scott Nathan said at the Ukraine Recovery Conference in Berlin (URC2024) that the US government is aware of security challenges and seeks to attract capital to Ukraine’s private sector. “We are using our unique tools, such as political risk insurance, loans, loan guarantees and equity investments, to strengthen investor confidence in Ukraine at this critical time,” Natan said.
The total value of four new deals within the framework of the Political Risk Insurance in Ukraine initiative is $357 million. As a result, the volume of DFC transactions in Ukraine since the beginning of the full-scale Russian invasion reached $848 million, and the total portfolio – $1.6 billion.
The new deals are part of a broader package that Nathan announced at the conference. He also met with world leaders and other officials involved in development financing.
Political risk insurance deals include a $50 million reinsurance program organized by Aon, underwritten by ARX Insurance Company, a Ukrainian subsidiary of Fairfax Financial Holdings. This will create a portfolio of war risk insurance policies for companies operating in Ukraine and support ARX in expanding its war risk insurance offering in Ukraine.
The agreements also include $150 million for political risk insurance to support existing operations in Ukraine’s agricultural export sector; a contract for political risk insurance in the amount of more than $152 million with a Ukrainian company in the production sector; and $5 million for political risk insurance to support Ukrainian students’ access to higher education during the war.
The DFC did not name some of the organizations involved in these deals because of the threat of military retaliation against companies working to aid Ukraine.
Scott Nathan also announced the provision of a loan portfolio guarantee to ProCredit Bank Ukraine in the amount of $28 million. The sponsor of the deal was USAID, which will support lending to Ukrainian small businesses and stimulate investments in Ukrainian business, especially in the agricultural sector, which works to strengthen food security in Ukraine.