The U.S. International Development Finance Corporation has reached an agreement with the World Bank’s guarantee arm, MIGA, to establish a political risk insurance framework tied to a joint U.S.-Ukrainian reconstruction investment fund.
The agreement was signed Thursday on the sidelines of a Ukraine recovery conference taking place in Gdansk, Poland. According to the DFC, the framework is designed to encourage and support private sector investment in Ukraine alongside the fund’s existing investments.
The U.S.-Ukrainian fund was established under a minerals agreement signed between the two countries a year ago and focuses on five key sectors, with critical minerals among them. Ukraine remains engaged in active combat against Russia’s full-scale military invasion, which began in February 2022. Ukraine has indicated that approval of a second project under the fund is expected within the coming weeks.
DFC Chief of Staff Conor Coleman said the agreement would allow the agency to bring additional private investment vehicles alongside joint projects being pursued under the U.S.-Ukraine Reconstruction Investment Fund. He added that the arrangement would give investors the “confidence to pursue high-impact opportunities in Ukraine,” though he offered no additional specifics.
Political risk insurance is a specialized form of coverage that shields businesses, investors, and lenders from financial losses resulting from unstable government actions, political unrest, or geopolitical conflict.
Ed Mountfield, vice president and chief financial officer of the World Bank’s Multilateral Investment Guarantee Agency, said investment guarantees are essential for drawing in private capital and that the partnership would help improve Ukraine’s broader business climate.
The agreement was signed by Coleman and Mountfield, with Ukraine Economy Minister Oleksiy Sobolev, World Bank President Ajay Banga, and U.S. Treasury Undersecretary Jonathan Greenstein present as witnesses.
