Ministry of Economy of Ukraine
United Kingdom contributes GBP 20 million to MIGA’s Support to Ukraine’s Reconstruction and Economy Trust Fund
22.12.2023 | 16:05 | Section for Public and Mass Media RelationsThe United Kingdom has announced a contribution of GBP 20 million to the Support to Ukraine’s Reconstruction and Economy (SURE) Trust Fund, launched by the World Bank’s Multilateral Investment Guarantee Agency (MIGA) in February 2023. This was reported by MIGA.
“We would like to thank our UK partners for their contribution to the Support to Ukraine’s Reconstruction and Economy (SURE) Trust Fund. In addition to the financial support the Fund is providing to the real sector of the Ukrainian economy, it is important to us that more and more countries are joining to support investors who are ready to participate in Ukraine’s recovery without waiting for the war to end. MIGA guarantees are an important risk mitigation tool to ensure the continuity of private sector operations and attract investment for the recovery and reconstruction of the country,” Yuliia Svyrydenko, First Deputy Prime Minister - Minister of Economy of Ukraine, noted.
Russia’s invasion of Ukraine has caused damage estimated by the World Bank at USD 411 billion. Rebuilding on such scale requires private investments and solutions that facilitate private sector investment, key among them mitigation of war risk. MIGA can provide meaningful contribution to offering such solutions to the private sector.
“The support from the United Kingdom will be crucial in continuing our support to Ukraine, and help keep the economic engine operational. The SURE Trust Fund has already supported several projects in Ukraine. We are committed to help Ukraine and its people during this difficult time,” Hiroshi Matano, Executive Vice President of MIGA, noted.
MIGA has been a proactive provider of insurance in Ukraine, issuing more than USD 215 million in political risk insurance guarantees since the russian invasion began in February 2022. Because of the ongoing war, private insurers have been unable to provide political risk insurance in Ukraine. The SURE Trust Fund allows MIGA to continue supporting foreign direct investment into Ukraine during this challenging period for the country. Together with Norway’s contribution of approximately USD 22 million, MIGA will now be able to insure a minimum of USD 100 million of new investment in Ukraine.
“Today’s signing gives businesses and investors the fundamental tools they need to get directly involved in Ukraine’s recovery from this horrific war. As co-chair of the UK-Ukraine Infrastructure Taskforce, I and the UK Government are committed to supporting Ukraine’s long-term reconstruction needs. Our GBP 20 million contribution into the MIGA insurance trust fund will de-risk projects and attract much-needed private investment into Ukraine to support economic recovery now and into the future,” Nusrat Ghani, the UK’s Minister for Industry & Economic Security, said.
Once the hostilities are over and large-scale reconstruction begins, the SURE Trust Fund will provide political risk insurance to international lenders and sponsors for reconstruction efforts in critical sectors including transport, housing, and energy. The fund is expected to grow to USD 300 million through contributions from additional donors, which will allow MIGA to provide trade finance guarantees, insurance on bank reserves during the conflict, and political risk insurance to support post-war reconstruction after.
We remind that Japan which is the founder of the fund was the first to make a contribution to the SURE fund. After that, Norway and Belgium have joined the fund, and now the United Kingdom has made its contribution. In its turn, Japan has increased its contribution recently.
Background:
The multilateral investment guarantee agency, MIGA, was established in 1988. It is a member of the World Bank Group and works to promote foreign direct investment in developing economies. MIGA’s activities should reduce the risks of restrictions on currency conversion and transfer, breach of contracts by governments, expropriation, war and civil unrest. One of the main missions of the agency is to offer improved credit conditions to private investors and creditors. Since its establishment, MIGA has issued more than USD 70 billion in guarantees in 123 developing countries. Funds were used to support more than 1,000 projects.
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