Important step to investment insurance through Export Credit Agency of Ukraine
On 22 November 2023, the Verkhovna Rada of Ukraine approved Bill #9015, amending the Law of Ukraine "On financial mechanisms for stimulating export activities" regarding the insurance of investments in Ukraine against war and political risks ("Bill #9015").
Bill #9015 grants the Export Credit Agency of Ukraine (ECA) the right to insure and reinsure against war and political risks the following:
credits of Ukrainian economic entities related to investments in the creation of facilities and infrastructure necessary for the development of processing industries and the export of goods (works, services) of Ukrainian origin; and
direct investments from and into Ukraine.
At the same time, final and transitional provisions stipulate that the list of war and political risks, as well as the terms and procedures for insuring (reinsuring) such risks, will be determined by the Cabinet of Ministers of Ukraine in consultation with the National Bank of Ukraine within three months from the date of publication of the Bill #9015.
Bill #9015 also envisages changes to the list of sources of financing programs for credit support of Ukrainian exporters. It provides for a possibility of Funding not only from the state budget through authorized banks but also from other sources specified by law. Although Bill #9015 does not stipulate an express list of such extra sources, international investors are expected to be involved in providing the corresponding financing.
Bill #9015 is a positive sign for businesses operating in Ukraine, and it will most probably facilitate the attraction of new investments into the economy amid the ongoing war. It is a necessary, but not the only, condition for launching investment insurance through the ECA. The capitalization of ECA, to which the Ukrainian government is currently actively engaging foreign partners, will also be of key importance.
It is expected that Bill #9015 will come into effect on 1 January 2024, except for final and transitional provisions, which will come into effect the day after the publication of the law. As of the date of this announcement, Bill #9015 has been sent for the President of Ukraine's signature.