The United Kingdom has contributed £20 million to the Reconstruction and Economic Development Support Fund for Ukraine under the supervision of MIGA
The United Kingdom has announced a contribution of £20 million to the Surety Trust Fund for Reconstruction and the Economy of Ukraine (SURE), initiated by the Multilateral Investment Guarantee Agency (MIGA) of the World Bank in February 2023. MIGA has reported this development.
"We would like to thank our partners from the United Kingdom for their contribution to the Surety Trust Fund for Reconstruction and the Economy of Ukraine (SURE). In addition to the financial support provided by the fund in the real sector of the Ukrainian economy, it is important for us that more countries are joining the support for investors who are ready to participate in Ukraine's recovery, without waiting for the end of the war. MIGA guarantees are a key tool for risk reduction, ensuring the continuity of private sector activities and attracting investments for the recovery and reconstruction of the country," emphasized Yulia Sviridenko, the First Vice Prime Minister of Ukraine and the Minister of Economy of Ukraine.
Russia's invasion of Ukraine has resulted in damages estimated at $411 billion by the World Bank. Rebuilding on such a scale requires private investments and solutions that foster private sector investment, with a key aspect being the reduction of war risk. MIGA can make a significant contribution to offering such private sector solutions.
"The support of the United Kingdom will be crucial for continuing our assistance to Ukraine and helping preserve the economic engine. The SURE Trust Fund has already supported several projects in Ukraine. We aim to assist Ukraine and its people during this challenging time," stated Hiroshi Matano, Executive Vice President of MIGA.
MIGA has been an active provider of insurance in Ukraine, issuing political risk insurance guarantees totaling over $215 million since the start of Russia's invasion in February 2022. Due to the ongoing war, private insurers cannot provide political risk insurance in Ukraine. The SURE Trust Fund enables MIGA to continue supporting foreign direct investments in Ukraine during this difficult period for the country. With Norway's contribution of approximately $22 million, MIGA can now collectively insure a minimum of $100 million in new investments in Ukraine.
"Today's signing provides companies and investors with the fundamental tools necessary for their direct participation in the reconstruction of Ukraine after this horrific war. As the co-chair of the British-Ukrainian working group on infrastructure, I and the UK government aim to support Ukraine's long-term rebuilding needs. Our contribution of £20 million to the MIGA insurance trust fund will reduce project risks and attract much-needed private investments in Ukraine to support economic recovery now and in the future," said Nusrat Ghani, Minister of Industry and Economic Security of the United Kingdom.
After the conclusion of hostilities, a massive reconstruction effort will commence. The SURE Targeted Fund will provide political risk insurance to international creditors and sponsors involved in reconstruction efforts in critical sectors, including transportation, housing, and energy. It is expected that the fund will grow to $300 million through additional contributions from additional donors, allowing MIGA to provide trade financing guarantees, insurance of banking reserves during conflict, and political risk insurance to support post-war recovery.
It is worth noting that Japan, the founder of the fund, made the initial contribution, followed by Norway and Belgium. The United Kingdom has now joined in making its contribution, and Japan has recently increased its commitment to the fund.