Ukrainian Export-Credit Agency’s bylaws and tariffs adopted enabling provision of political insurance

In the end of May 2024, the Ukrainian Export-Credit Agency (ECA) has approved the commercial terms and tariffs for insurance coverage of direct investments and investment loans against political and war related risks.

Earlier, on 10th May the ECA has also adopted two internal policies stipulating procedure for insurance coverage against war and/or political risks of direct investments in Ukraine and investment loans. The main terms of the bylaws are as follows:

Direct investments insurance:

• The objects of insurance may be direct investments as well as the dividends from such direct investments.

• The object of investment may be a legal entity engaged in the creation of facilities and infrastructure necessary for the development of the processing industry and export of goods (works, services) of Ukrainian origin and is the recipient of direct investment (also “target”).

• The share of corporate rights of an investor (resident or non-resident of Ukraine, who is an individual or legal entity) in such an entity must exceed 10%.

• Under the insurance agreements, an unconditional deductible shall be applied as a percentage of the sum insured or the amount of insurance indemnity, in absolute amount or in other calculation units specified in the insurance agreement, which shall be deducted by ECA when paying insurance indemnity for each insured event.

• The insured amount in respect of the direct investments shall be determined by agreement of the insured and the insurer within the value of the investment, namely:

  • the amount of the insured's money transfer in favor of the target;
  • the value of tangible (machinery, equipment, facilities; raw materials, materials, semi-finished products) and intangible (innovations, patents, licenses, trademarks, etc.) assets, contributed by the insured to the capital of the target;
  • the amount of paid-in registered capital of the insured on the balance sheet of the target.

• The sum amount in respect of the dividends shall be determined by agreement of the insured and the insurer based on the estimated amount of dividends from direct investment declared by the insured.

• The insurance tariff shall be determined individually for each insurance contract, in the range of 0.49% to 8.05%.

• The sum insured shall be set in UAN and currently may not exceed UAH 200 million.

• The insurance indemnity shall be paid in UAH at the official exchange rate of the National Bank of Ukraine on the day of payment within five business days from the date of the relevant decision of the ECA.

Investment loans insurance:

• The policy covers insurance of investment loans related to the establishment of facilities and infrastructure necessary for the development of the manufacturing industry and export of Ukrainian goods, works and services.
• Under this policy the insured will be a bank that has provided or intends to provide an investment loan to a borrower (only business entities - residents of Ukraine can be eligible).
• The insurance amount is established in the currency of the investment loan under the insurance contract. It shall be determined based on the terms of the loan agreement considering the legislation of Ukraine and cannot exceed 100% of the debt limit or principal debt. The maximum insurance amount is UAH 200 million.
• The provisions relating to the unconditional deductible and insurance indemnity payment are similar to those applicable to the coverage of direct investments.
• The insurance tariff is determined individually for each insurance contract, in the range of 0.95% to 4.05%.

The bylaws also stipulate the list of insurance events and insurance risks, as well as the relevant exemptions.