The World Bank's Multilateral Investment Guarantee Agency (MIGA) has issued Ukraine's first war-risk guarantees for private investors, providing $9.1 million of war insurance for the construction and operation of a warehouse and supporting infrastructure in the western city of Lviv.
The insurance covers the investment of UIPH Ukrainian Industrial Property Holding Limited of Cyprus in the form of equity and a shareholder loan in Lviv's M10 Industrial Park Project against the risk of war and civil disturbance for up to 10 years, MIGA announced.
The company, 65% owned by Ukrainian investment firm Dragon Capital Investments and 35% owned by the European Bank for Reconstruction and Development (EBRD), is building "new industrial and logistics warehouse space essential for sustained economic activities during both the war and post-war reconstruction," MIGA said.
Construction of Phase 1 of the M10 Lviv Industrial Park, 60 km from the border with Poland, is scheduled for completion in the second half of this year, creating the first 14,400-square-meter warehouse complex on the site. The EBRD said earlier this year that it will invest as much as $24.5 million of equity in the US$ 70 million development, including $5.5 million invested in Phase 1.
The guarantee represents a significant advancement in the rebuilding of Ukraine, as private investors are leery to commit to large investments that can't be insured against a possible military strike in a time of war.
"We continue to support and facilitate the war risk insurance programs for the private sector in Ukraine to cover investment risk and believe that in tight cooperation with donors and the international financial community, many domestic and foreign companies will be able to apply and get new guarantees," Ukrainian Economy Minister Yulia Svyridenko said.
