The U.S. International Development Finance Corporation (DFC) and the World Bank’s Multilateral Investment Guarantee Agency (MIGA) agreed to establish a political risk insurance framework supporting the U.S.-Ukraine Reconstruction Investment Fund.
The agreement was signed during the Ukraine Recovery Conference in Gdansk, Poland. The framework aims to encourage private sector investment in Ukraine by providing political risk insurance for projects backed by the reconstruction fund.
The U.S.-Ukraine Reconstruction Investment Fund was established under the bilateral minerals agreement signed by the United States and Ukraine a year earlier.
The fund focuses on five strategic sectors, including critical minerals, while Ukraine continues defending against Russia’s full-scale invasion.
“DFC has been active in Ukraine since the country’s independence, and it has become one of our largest markets globally. While President Trump is working tirelessly to secure a lasting peace, DFC, along with our partners across the U.S. Government, is committed to rebuilding Ukraine’s economy.”
Building an entity like URIF, the U.S.-Ukraine Reconstruction Investment Fund, is something no agency has done before. For DFC, our investments represent more than just a financial return. They are an investment in Ukraine’s future and in the enduring partnership between our nations. It is our deepest hope that this progress continues. We are proud to be a part of this effort, and we remain committed to a lasting peace.
Ben Black, DFC CEO
DFC collaborates with the private sector to finance solutions to critical challenges in developing countries. Investments span various sectors, including energy, healthcare, infrastructure, agriculture, and small business services, adhering to high standards and respecting environmental, human, and worker rights.
According to Beinsure, Ukrainian authorities expect approval of a second investment project within the coming weeks as the reconstruction programme expands.
DFC Chief of Staff Conor Coleman said the agreement will allow the agency to mobilise additional private investment vehicles alongside projects developed jointly with the Ukrainian government through the reconstruction fund. He said the insurance framework will give investors greater confidence to pursue investment opportunities in Ukraine.
Political risk insurance protects investors, lenders and businesses against financial losses resulting from government actions, political instability, expropriation, currency restrictions, political violence and other geopolitical risks.
Ed Mountfield, Vice President and Chief Financial Officer of MIGA, said investment guarantees remain an important tool for attracting private capital into Ukraine. He added that the partnership will strengthen the country’s investment climate and support broader economic recovery.
Coleman and Mountfield signed the agreement in the presence of Ukraine’s Economy Minister Oleksiy Sobolev, World Bank President Ajay Banga and U.S. Treasury Under Secretary Jonathan Greenstein.
In June 2024, U.S. International Development Finance Corporation (DFC) announces $357 mn in new political risk insurance in Ukraine as russia’s invasion threatens critical private investment.
“The U.S. Government recognizes these security concerns and is taking steps to help drive capital to the private sector in Ukraine. We are leveraging our unique tools, especially political risk insurance, along with loans, loan guaranties, and equity investments, to build investor confidence in Ukraine at this critical moment”, Scott Nathan said.
The four new transactions total $357 mn, raising DFC’s total transactions in Ukraine to $848 mn since Russia’s War in Ukraine and its overall portfolio in the country to $1.6 bn.
These transactions form part of a larger package announced at a conference where Nathan met with global leaders and development finance officials.
The U.S. International Development Finance Corporation (DFC) is the international investment arm of the United States Government and central to U.S. economic statecraft. DFC mobilizes private capital to advance U.S. foreign policy and economic development.
