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macro-financial stability and, at the same time, will support Ukraine's defence capability.
The head of the NBU, referring to the monitoring of the financial condition and the results of the assessment of the stability of banks, believes that financial institutions are quite capable of making additional payments in the current conditions.
8.1.4 Bank news
Ukraine is preparing to turn a state bank into a development bank. The goal is to turn one of the state banks into a development bank, similar to KfW in Germany, said the head of the Parliamentary Committee on Finance, Danylo Hetmantsev, during the Yalta European Strategy forum. In his opinion, this step will increase the effectiveness of Ukraine's recovery and attract more funding, including private funding. "This bank should have one main task - to finance the restoration, the entities participating in the restoration, special rules and specialization in development projects," Hetmantsev said. He also emphasized introducing special regulations and licenses for this bank to ensure it can take over part of the needed financing. After the nationalization of Sens Bank in July, five state-owned banks remained in Ukraine, four of which are among the top five in terms of assets. State-owned banks generate a significant share of net profit and have a large share of the Ukrainian banking system's total assets.
MIGA has insured the first investment project in Ukraine against war risk.
The insured project is the M10 Industrial Park in Lviv, which received a guarantee from the World Bank's Multilateral Investment Guarantee Agency. MIGA provides guarantees of up to $9.2M to a Cypriot company, UIPH Ukrainian Industrial Property Holding Limited (60% of the shares are owned by Dragon Capital), against war risks and civil unrest for up to 10 years. Economy Minister Yuliya Svyridenko explained that this is a guarantee for the loan funds taken by the company for the construction and operation of the warehouse complex and related infrastructure in the M10 industrial park. "We have been coming to this important decision for a very long time. This is a signal not only for new potential investors who are considering investment opportunities in Ukraine. It is also the first step towards the launch of the war risk insurance market," Svyridenko said.
Ukraine's government expects seven military risk insurance projects from MIGA and DFC by the end of 2023. The Multilateral Investment Guarantee Agency (MIGA) can implement three military risk insurance projects in Ukraine by the end of the year, and the US International Finance Corporation (DFC) can launch four, Ukraine's Economy Minister Yuliya Svyridenko said at the Regional Economic Forum in Kyiv. MIGA will work with international investors DFC on the projects both inside and outside of Ukraine. MIGA insures investment risks such as political, currency inconvertibility, and expropriation, while DFC also provides trade finance services and loan portfolio guarantees. MIGA provided $143M in military risk insurance in the financial sector and $14M in the real economy. Svyridenko added that the EBRD is also creating a €200M fund, with eight funds confirming their participation, which will insure goods in transit and storage for both foreign and Ukrainian investors against war risk and provide trade financing and guarantees.
68 UKRAINE Country Report October 2023 www.intellinews.com