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According to the Decree of the Cabinet of Ministers of Ukraine No. 388 dated April 19, 2024, the Export Credit Agency (ECA) is entitled to carry out insurance and reinsurance of military and political risks arising in the process of business activities provided by law.

Special attention should be drawn to investment insurance, an important tool for defense of investors against unforeseen events.

Insurance amount

Insurance amount shall be based on risk assessment and the investment project cost. In accordance with conditions specified in the Decree, maximum insurance amount may be restricted by certain ECA limits, in order to facilitate balance between the agency’s risks and opportunities. In addition, insurance amount can be increased depending on project specifications and additional guarantees provided by the investor.

Insurance conditions

Insurance conditions include the following:

1. Risk assessment: Before entry into insurance contract, a detailed assessment of risks associated with the investment project shall be carried out, including analysis of political and economic situation in the country where investment is made, as well as possible military threats. Risk assessment shall be based on the data received from state authorities, independent experts and international organizations.

2. Insurance premiums: The amount of insurance premiums shall be fixed on the basis of risk assessment and investment value. Premiums can be either paid once or spread over a certain period. NB: premiums may vary depending on risk degree and insurance contract validity contract.

3. Payment of insurance indemnity: In case of an insured event, insurance indemnity shall be payable in accordance with terms of the contract. It may include reimbursement of losses related to nationalization, seizure, hostilities or other political risks. The aforesaid process also includes procedure for submitting and reviewing insurance claims, to be detailed in the contract.

4. Reinsurance: To reduce risks, ECA may enter into reinsurance contracts with other insurance companies, in order to distribute risks and to secure stability of insurance payments. Reinsurance also facilitates reducing financial burden on the ECA and securing reliability of obligations to insurants.

5. Additional conditions and specifications: Insurance contracts may include additional terms, such as requirements for insurant regarding precautionary measures, risk monitoring and regular reporting. Special conditions may also be prescribed for certain types of investments, such as infrastructure projects or innovative enterprises.

Therefore, investment insurance provided by the Export Credit Agency is an important tool for protecting investors from military and political risks.

This is a new institute for Ukraine, which promotes attraction of investments and economy development in Ukraine, having facilitated reliable protection of capital investments.

It should be noted that at each stage of insurance conditions the investor will need legal assistance from local lawyers – experts in insurance and investment issues.

For legal advice upon the raised issue, we encourage all the parties concerned to contact Dmytro Ochkolias, Interlegal associate attorney.

More information at the link: https://www.kmu.gov.ua/npas/pro-zatverdzhennia-pereliku-voiennykh-ta-politychnykh-ryzykiv-ta-umov-i-poriadku-s38890424

Among the countries of the G7, Japan stands out as a very generous partner of Ukraine, with a discreet style of communication regarding its investment projects in the country tormented by the Russian invasion.

The important thing about the Japanese approach is an accurate preliminary study of the territory being invested in and the medium-long term strategic vision. An example of this style of work is represented by the project illustrated by the Japan-based consulting and engineering firm PADECO, during the online seminar at the end of May 2024, organised by the law firm Interlegal of Odessa and the EBA European Business Association – Southern Ukrainian Office, dedicated to investments and projects of development in southern Ukraine.

Among the speakers, Yoshi Nakagawa, Director for Infrastructure Development Division of PADECO, who worked on several infrastructure projects in Ukraine since 2004, illustrated a large project to enhance logistics between Ukraine and the European Union, investing in the trade route via Romania.

The Odessa region is strategic for Ukrainian exports to Europe, Asia and Africa, thanks to a system of 7 ports, of which the 3 largest are around Odessa, and another 3 are located on the Danube. The invasion of Ukraine with the naval blockade of the Russian Black Sea fleet has endangered maritime traffic, revealing a critical factor of weakness in Ukraine’s trade routes. In fact, the blockade of Ukrainian ports has highlighted the difficulty of alternative transport of food and mineral commodities, due to the obsolete railway network and the insufficient number of bridges over large rivers. This problem is overcome by the Japanese plan drawn up by the consultancy firm PADECO, which envisages implementation through mixed partnerships between Japanese and Ukrainian companies. 

In February 2024, the Government of Japan held the Japan-Ukraine Conference for Promotion of Economic Growth and Reconstruction in Tokyo. More than 50 cooperation documents between Japanese companies, including startups, and their Ukrainian partners were exchanged as an outcome of the conference. Over 30 Japanese companies and groups, including PADECO, opened a booth for their technologies and products applicable for Ukraine. The Japanese consulting firm is dealing with 3 projects of the 50 presented:

Project 1: Connectivity Improvement between Ukraine and Romania through M15.

Project 2: Power Transmission Resiliency Solution with drone application on power transmission inspection (funding by World Bank, beneficiary UkrEnergo).

Project 3: Debris Management technology for waste treatment. An Urban Rig which was used for Tsunami disaster.

The Project 1 – M15 Connectivity Improvement, which is worth to be described with more details, is structured into two phases:

Urgent repair of the Bridge in Mayaky City (Portable Panel Bridge in construction). Currently the Mayaky Bridge on the M15 national road has been damaged by bombing and it is necessary to build a new bridge on another stretch of the Dniester River.

Improvement of National Road M15, including the project of a new bridge over Danube on the Romania-Ukraine border and a large-scale bridge across Dniester. This second bridge over the same river, but further towards the coast, would enhance wheel transport.

The period of works is: November 2023 – March 2024. The funding is provided by the Ministry of Economy, Trade and Industry (METI) of Japan.

The strategic value of this infrastructure to be built is the possibility of increasing Ukrainian exports by using the Port of Constanta (Romania) as an alternative for goods arriving from Asia and Turkey. This new communication route would guarantee a safe outlet for those commodities on which the food security of many countries depends. Furthermore, in view of the accession process to the European Union, this new route would improve Ukrainian access to the Schengen area. From Odessa, alternative routes to access the EU are to Poland or Romania via Moldova. Both are longer and with transport that is still too obsolete. Furthermore, Moldova remains a country of high political risk, due to the illegal Republic of Transnistria with the presence of Russian troops.

But the most ambitious work of this project is the construction of a suspension bridge to cross the Danube, of the same type as the Braila Bridge inaugurated in Romania in 2023.

The EU TEN-T Network Revision (2022 July) designated the M15 road as “Comprehensive”, and supposed to be completed by the year 2050.

With the help of the Japanese Government, Ukraine strengthens and protects export routes, moving closer to the European Union.

Source: https://odessa-journal.com/japanese-project-to-improve-trade-routes-towards-europe-in-southern-ukraine

nterfax-Ukraine writes that the German company Notus Energy plans to build a wind power plant with a total capacity of 300 MW in Odesa region, as reported Knud Rissel, the company’s commercial director.

Knud Rissel noted that Notus Energy has been working on this project since the spring of 2022 and now it is in the process of building a wind power plant with step-by-step launch. First stage of 120 MW should appear soon.

 “We already have all the permits, in particular related to land. Banks support us, although they also take risks by supporting us. But we are all ready to work even under martial law.” Knud Rissel said.

He assumed that first stage of a wind power plant will not be launched in the coming winter, but the company is doing its best to launch the project as soon as possible.

Source: https://bzh.life/ua/plany/1718450416-nimetska-kompaniya-pobudue-vitroelektrostantsiyu/

Even a child in Ukraine can nowadays quickly identify the air alert sound, showing you the shortest way to the shelter in the neighbourhood. This is the new “normality” since the beginning of Russia’s brutal war against Ukraine. A war against Ukraine’s state and nation, its people’s independence, democracy, and liberty. 

Living in the war reality, under constant shelling, missile attacks and other threats, Ukrainians understand the value of “safety and security”. That’s why the civil security agencies of Ukraine put all their efforts into making people’s lives safer.

Being on the ground, the EU Advisory Mission (EUAM) Ukraine sees the unprecedented challenges their national partners face daily throughout Ukraine, including the liberated areas.

EUAM Ukraine’s Head of Mission (HoM), Rolf Holmboe, visited the Ukrainian South to meet counterparts from Odesa, Mykolaiv, and Kherson regions and get the latest update on challenges and developments in the area, on 9-11 January 2024.

Support in restoring Policing and Rule of Law in the Liberated Areas

When in the South, Rolf Holmboe, met partners from Mykolaiv and Kherson regions involved in restoring policing and the rule of law in the liberated territories, which is among the Mission’s priorities, including the senior management of the regional police, and the Prosecution Office and authorities. 

The Head of the National Police in Kherson region, Ihor Korol, explained to the Head of Mission how difficult it is to operate in liberated Kherson city. “The police officers are heavily overloaded with work. Operating under constant shelling, they usually have no adequate rest or recuperation”. The high-risk environment in Kherson made the National Police and other civil security agencies move many facilities down to the basements of the buildings. The extremely high mine contamination of the area, considering the limited number of specialised personnel and equipment, is currently also a huge risk. Despite it all, Kherson and Mykolaiv police officers and prosecutors deal with international crimes daily and, thus, require special equipment and armoured vehicles while working at the scene.

Rolf Holmboe conveyed to the Ukrainian partners about the EU’s commitment to further support for overcoming the many challenges they face while investigating and prosecuting war crimes, and ensuring a safe environment in liberated territories. The Mission, said Holmboe, will continue providing strategic advice, specialised training, necessary equipment and engaging more international partners for the purpose.

Solidarity lanes and Integrated Border Management

The regular Russia’s attacks on the Odesa region, particularly the ports, have the effect of depleting resources and harm infrastructures as aimed at hitting Ukraine’s export potential. During a meeting, with Rear-Admiral Oleh Kostur, the Head of the Regional Marine Guard Directorate, and Oleh Kiper, the Head of the Odesa Military Administration, on 10 January, Rolf Holmboe discussed the possibilities of cooperation, as well as urgent needs to improve the counterpart’s capacity to ensure sustainable operation of Ukrainian ports in Odesa and Danube Delta.

Support for Ukrainian security future: working with police universities.

On the last day of his visit to the South, EUAM Ukraine’s Head discussed challenges and prospects of police education in Ukraine at the Odesa State University of Internal Affairs with rector, the colonel Dmytro Schvets. The сolonel highlighted how much attention is paid to creating practical skill sets for future police officers. They visited the specialised classrooms for the training on domestic violence cases, interviewing children, court hearings, tactical medicine, shooting range, mediation centre, and also the University Museum. 

Rolf Holmboe and Dmytro Schvets shared their views on ongoing joint activities and plans in a friendly atmosphere. “The University professors and the students appreciate the constant support of EUAM Ukraine’s Odesa Field Office. We can see your representatives almost every day in the corridors of our University,” underlined the police colonel.

EUAM Ukraine strives to support Ukraine in raising its capacity to ensure a safe and secure state for its citizens, despite the war realities.

Source: https://www.euam-ukraine.eu/news/ukrainian-south-s-resilience-unbroken-euam-ukraine-s-head-visits-mykolaiv-and-odesa/

BRUSSELS, June 6 (Reuters) – The Group of Seven countries and the European Union are considering how to use profits generated by Russian assets immobilised in the West to provide Ukraine with a large up-front loan now and secure Kyiv’s financing for 2025.

BASIC CONCEPT

Around 260 billion euros of Russian central bank funds are frozen worldwide, most of it in the EU. The funds generate 2.5 billion-3.5 billion euros a year in profit, which the EU says is not contractually owed to Russia and therefore represents a windfall. The idea, championed by the United States, is to use this profit as a steady revenue stream to service a large loan of $50 billion that could be raised on the market. Russia says any diversion of the profits from its frozen funds would amount to theft.

TIMING

Senior European officials say an agreement to go ahead with such a loan at a June 13-15 summit of the G7 — the U.S., Canada, Japan, Britain, France, Germany and Italy — would send a powerful signal of unity behind Kyiv on the eve of an international conference on Ukraine in Switzerland. It would also ensure Kyiv has financing for all of 2025 no matter who wins the U.S. presidential election on Nov 5th.

MAIN OPTIONS

Senior European officials say discussions are increasingly focusing on two options depending on who would borrow the money for Ukraine, with different details to be sorted out depending on the choice.

U.S. BORROWS TO LEND TO UKRAINE

Under one scenario, supported by a majority of EU countries, the United States would raise the money on the market and the European Union would give Washington assurances the windfall profits would be available to service the U.S. borrowing.

The advantage of this option is that it is quick and that it would not create any new obligations for European countries in terms of joint debt — an important consideration for a group of EU countries led by Germany.

The main problem is the extent and form of the assurances needed by Washington, and who would guarantee, and in what part, the repayment of such borrowing, especially if there is a Ukrainian debt restructuring or changes in interest rates that could upset initial calculations.

Many EU governments want G7 countries to participate in the risk-sharing, possibly proportionately to the size of their GDP.

Because the Russian assets are frozen in Europe under a sanctions regime that has to be unanimously renewed by all 27 EU governments every six months, Washington is concerned a veto from Hungary, which is close to the Kremlin, could cut off the money. It wants to see the sanctions regime changed accordingly.

Diplomats said Hungary wants the issue of the leveraging of the profits to be discussed by EU leaders on June 27-28.

EU BORROWS TO LEND TO UKRAINE

The other general option is that the EU borrows the money for Ukraine on its own, guaranteeing the repayment of bonds with money from the EU budget.

The main advantage is that the whole process stays in-house: the EU can use the windfall profits as it wants and there is no need to change the sanctions regime to bypass Hungary because a loan under the EU’s Macro Financial Assistance framework is agreed by qualified majority, not unanimity.

The downside is that the process would be long because it would need the consent of the European Parliament. A new European Parliament will only be elected on June 9th and constitute itself in July before a summer break for all of August. Getting parliamentary consent would therefore take many months.

The other drawback in the eyes of some EU countries is that this option would place all the risk associated with the borrowing on EU countries, making them jointly responsible for repayment, an idea particularly disliked in Berlin.

Source: https://www.reuters.com/world/europe/how-g7-eu-plan-leverage-frozen-russian-assets-ukraine-2024-06-06/

U.S. Special Representative Penny Pritzker discusses ongoing Ukraine recovery and reconstruction efforts, having just returned from three trips to Ukraine in six weeks, including joining the Secretary of State in mid-May. She will also outline U.S. priorities for supporting Ukraine in advance of the Ukraine Recovery Conference on June 11-12 in Berlin.

FROMAN: Well, welcome, everybody. My name is Mike Froman. I’m president of the Council. And it’s really a great honor to convene this meeting, both because of the importance of the issue—reconstruction of Ukraine—but even more so because of our guest, Penny Pritzker, who I had the pleasure of working with, well, for years, actually, in the Obama administration and even before.  

She is the president’s special representative for Ukraine’s economic recovery. It’s a position she brings an immense amount of experience to, both from having been in government but, very importantly, being a very successful businessperson and entrepreneur as well. Having set up really dozens of businesses and invested in them over the years and brings a real private sector eye to the challenges of rebuilding Ukraine’s economy and society, as well. I had the pleasure of working most closely with Penny when she was the secretary of commerce. And I saw from a ringside seat just how she elevated that role to a whole new—a whole new level, in terms of both the span of work, its effectiveness, and the importance to the U.S. government. 

So it’s a pleasure to welcome my friend Penny Pritzker. She’s going to give remarks for a few minutes, and then we’re going to have a conversation and open it up to questions. Please welcome Penny Pritzker. (Applause.) 

PRITZKER: So I’m really honored to be here today. Thank you. Mike, thank you very much. First, thanks for the warm introduction and, frankly, for being such a great partner. We worked for years together and your tireless efforts to find solutions for many of our global challenges is really something that I always appreciated. I really felt like we had a true partnership working in government. And thank you for your friendship as well.  

I want to thank also the Council community for hosting me today. I’ve been a proud member of the Council on Foreign Relations for years. And I was a former board member. And it’s a real privilege to have the opportunity to speak with you all today. You’re really a group of doers and committed to our planet’s collective peace and economic security. So it’s a pleasure to be able to come and talk about a subject near and dear to my heart. I’m also particularly grateful to the European brain trust here at CFR—Charlie Kupchan, Liana Fix, Thomas Graham, and, of course, Ambassador Stephen Sestanovich, whose work on behalf of the United States regarding the newly independent states of the former Soviet Union back in the ’90s still bears huge influence today.  

Let me start by talking about the situation on the ground in Ukraine today. On the battlefield, there is no doubt that the past months have been difficult, with the delays in our security and economic assistance leading to a situation in which Ukraine has lost ground in the war. That’s really undeniable. Since March 22 of this year, Vladimir Putin really doubled down on his cruelty, stepping up his attacks on Ukraine’s energy infrastructure; laying siege to Ukraine’s beautiful second city, Kharkiv; and seeking to break the psyche of the Ukrainian people. He has intensified his shelling of hospitals, schools, homes, around the towns of Chasiv Yar and of Vovchansk, which are near Kharkiv.  

And he has positioned 30,000 troops just over the Russian border—in Russia, but right over the border from Kharkiv, in an apparent preparation for a further assault. These attacks have forced more than 10,000 residents from the oblast to flee their homes and created an eight-gigawatt energy generation gap this summer. He depends upon his dark alliances for these attacks, with Iranian drones, North Korean artillery, and Chinese satellite imagery all contributing to the death, destruction, and needless suffering that we are witnessing. So without a doubt, these are sobering facts. 

And yet, amid the dark headlines, I’m here today to talk about why there is real reason for optimism towards Ukraine due to the facts and trends that we see, and which the media does not often capture. As we head towards Ukraine reconstruction conference in Berlin, which will occur in about three weeks, it’s important that we not just take advantage of these trends, but that we take heart from them. They show our belief in Ukraine’s future is not only based on a—it’s not based on a Pollyannish fantasy, but based on the reality as we see it at play.  

I’ve traveled to Ukraine five times since being named President Biden’s special representative for Ukraine’s economic recovery in September, and most recently I was there two weeks ago. And I’ve seen the trends with my own eyes. What we see is that with our help, Ukraine can and will win this war. And today, I’d like to explain why we believe it will, and describe a few key things that must happen on the economic side for that victory to take place.  

First, militarily. Though the supplemental was delayed, Ukraine is now getting what it needs. In the last thirty-one days since President Biden signed the supplemental legislation, the United States has flooded the zone with weapons and equipment, including couple billion dollars in munitions, including air defense systems, ammunition, armored vehicles, small arms, and other equipment. The democratic world is also there with us. The Czechs are leading a European effort to rush 500,000 artillery rounds to Ukraine. The U.K. has just announced a new multiyear military package. Germany is supplying a new Patriot system. Australia is providing a new air defense system of its own. And Ukrainian-manned F-16s will be flying over the airspace within months, provided by the Europeans.  

Ukraine is wasting no time that putting this wave of support into action. And its difficult, but absolutely necessary, new conscription law which just went into force will help it ensure it has troops necessary to defend itself. This is, of course, on top of the huge success Ukraine has seen in the Black Sea, where it pinned back Russia’s fleet, and its overall success in the battlefield, where it has by and large held a much larger force at bay along front lines that are over 600 miles long.  

Economically, we’re also seeing Ukraine take important strides forward. Take Ukraine’s defense industrial base. The number of drone manufacturers has grown from nine to over 200. Cyber, robotic systems, and demining expertise are skyrocketing. And data from the battlefield is helping Ukraine’s defense industries reduce the time for development of new technologies from years to weeks, with concrete impacts on the battlefield effectiveness. As the drone manufacturer Brave1 says, Ukraine is, and I quote, “where the technologies of victories are born.”  

American defense CEOs would agree. They literally marvel at the innovation of Ukraine’s defense production, sometimes combining different technologies, precision missiles, drones, armored vehicles, with American, Soviet, and European parts, to create whole new systems. It is this kind of creativity that is putting Ukraine’s defense companies at the leading edge of modern warfare technology. In fact, three American defense companies are working right now with their Ukrainian counterparts, and us, to coproduce low- and medium-caliber munitions made in and for Ukraine. Another is working on the very first joint venture between an American and Ukrainian defense company. The United States wants to unleash more joint Ukrainian-American defense production on Ukraine’s soil. That’s why we just announced a $2 billion first of its kind Ukrainian defense enterprise fund that will provide more financing for production, repair, and maintenance.  

The bigger economic picture is also encouraging. Despite Russia’s war and having 17 percent of its territory occupied, Ukraine’s GDP grew 5 percent in 2023 and is on track to grow another 4 ½ percent this year. Investment is up 17 percent, tax revenues surged 25 percent in January, and more than 37,000 new businesses were registered in Ukraine in 2023—more than the number in 2021 before the war. American companies beyond the defense sector are helping coauthor this recovery. McDonald’s added more stores in Ukraine and served over 100 million Ukrainians just last year, sourcing 70 percent of its beef, dairy, vegetables, and sunflower oil from inside Ukraine. ADM and Cargill are investing in agricultural projects and reinvesting profits back into Ukraine’s rich, black soil. So things are happening. That’s why there are over fifty American companies that are going to be in Berlin for the recovery conference to talk about their investments and even expansions in Ukraine. 

While all this is important and it’s positive, we cannot be naïve about the challenges Ukraine faces. And these are not just challenges on the battlefield. We do believe Ukraine can and will win, with support of a huge coalition on Ukraine’s side. But we have to be clear eyed about what it will take for the country to win not just the war, but also set itself up for the future. So let me describe what I think it will take. To win for the long term, there are five essential elements the Ukrainians, together with the international community, must tackle head on. Elements that must be at the center of our discussions at the Ukraine recovery conference in Berlin.  

They include air defense systems needed to protect the border and over major population centers. A culture that embraces rule of law and rejects corruption. A government that has the capacity to define bankable projects for investment and provide cohesive cross-ministry planning. A global marketplace offering risk management tools that will make investment decisions easier. And, finally, sufficient capital, especially the use of Russian sovereign assets, to finance this vision. Taken together, these five elements can be rocket fuel that powers not just Ukraine’s true economic recovery, but also its journey to become a prosperous, democratic, independent country integrated into the EU and NATO, which is exactly what its people crave.  

So let me lay out each of these a little—in a little bit greater detail, as each are key U.S. priorities as we head to Berlin. First, air defense. Just look at Kyiv. When you look at Kyiv, you can see what the future can hold for Ukraine. So you get off the train from Poland and you find a bustling European city that has thriving industry, kids going to school, parents going to work, folks going shopping, a bustling nightlife, and even regular traffic jams. It’s become—(laughs)—it’s become Ukraine’s economic beacon, made possible by the protective umbrella of air defense. The same is starting to happen in Odesa. In order to generate breakout economic activity, create jobs that draw back the Ukrainian diaspora, and attract private sector investment, it’s essential that we and our allies figure out how to provide sufficient air protection to Ukraine’s centers of commercial activity, like Kharkiv, Dnipro, Lviv, and beyond. Security is essential to attracting large-scale investment. We all know that, but it is—takes a lot of work to make it a reality.  

Second, Ukraine’s defenses against corruption must be just as strong as its military defenses. Eight in ten Ukrainian say they believe more must be done about corruption. And we must help them. This means a judiciary protected from outside interference. This means a press free from political influence or pressure. This means digital customs and other tax collection systems. This means an independent, empowered, well-resourced anticorruption investigators, prosecutors, and judges. This means strengthening the rule of law for everyone. So when I speak to American CEOs, particularly those in the most crucial sectors like defense and energy, the first point they raise with me, after asking about the war, is always the need to fast track reforms and address corruption. American taxpayers and Congress also justifiably demand reform.  

I’m pleased to report that Ukraine’s made progress on its reform agenda, including making some very tough decisions. In just the last six months, for example, Ukraine has passed legislation regarding asset declaration—so, think of its politicians declaring the assets they own—antimonopoly regulation, judicial discipline reform, and corporate governance. I truly believe these efforts, and more, are essential to change the culture in Ukraine. But they will ultimately be just as much a part of the Zelensky government’s legacy as winning the war itself. He understands fighting corruption is linked to Ukraine’s secure, prosperous, Western future. So this requires not just changes in laws, but a fundamental systems and cultural change.  

Meanwhile, even as we support Ukraine to strengthen its defenses and deepen its reforms, we need to help Ukraine set up the ability to prioritize and prepare projects for investment and reconstruction. The estimates to rebuild Ukraine by the World Bank are around $500 billion. There has never in history been such a significant need. To do this successfully and efficiently, coordination will be essential. So just think, unlike the Marshall Plan where one actor, the United States, was driving the reconstruction of many countries across Western Europe, this is a case where many countries, businesses, people, are driving reconstruction of one nation—Ukraine. Obviously, that makes coordination more challenging, though it allows us to bring to bear unprecedented amounts of funding, creativity, expertise, and experience to the challenge.  

What we need now is to lash Ukraine’s ingenuity to a cross-ministerial process that will prioritize and prepare the country for reconstruction. It’s essential to power the country into the future. It’s essential to attract investors and significant capital. It’s essential to having sufficient resources, labor, raw materials, and more to actually build the Ukraine of the future. This mechanism needs to be several things at once—Ukrainian led, community driven, and nationally coordinated. At the same time, it must also be internationally backed, grounded in data, and supported by the best global engineering and planning prowess the world has to offer.  

It’s a tall order, but creating this capability is essential. If we can get these pieces in place and ensure cross-ministerial political consensus around the right structure, plan, and people, then Ukraine can realize a robust recovery. The mechanism can do many things—establish reconstruction goals, identify and prioritize investments, determine financing, ensure the availability of sufficient inputs and resources, set standards, and guarantee Euro-Atlantic level of openness and transparency. These are all things both Ukrainians and the international community are going to want and need for sufficient investment to occur.  

Critical to Ukraine realizing its forward-looking economy and its dream of being part of the EU is how it develops its overall energy, transportation, and communication infrastructure. For the country to have decentralized energy generation and storage, utilizing gas, nuclear power, and renewables, for it to have rail, roads, ports, shipping, and air transportation, as well as for to have digital and ICT communication systems, all seamlessly linked to the EU, to the single market, and the global economy, will require the kind of coordinating effort that I am describing here.  

Without a cross-ministerial mechanism to coordinate the planning, engineering, resource management, and financing of these foundational investments, it’s not going to be possible for Ukraine to achieve its vision outlined in the Ukraine plan and elsewhere. We, governments and the private sector, must work together with Ukraine to broaden its private sector and, frankly, its public sector absorptive capacity. This is going to take hard work, feasibility studies, technical engineering, and business plans. But it will help ideas and concepts become realizable projects that can and will draw investment. Helping Ukraine build out this absorptive capacity is essential and will increase the number of bankable projects—something that is sorely needed.  

Fourth, Ukraine’s full-scale recovery will also require that we help the private sector manage risk. And, yes, this too is already happening. The U.S. Development Finance Corporation, DFC, is active and expanding its political risk portfolio for Ukraine. The European Bank for Reconstruction and Development, EBRD, is leading the development of a facility to provide coverage against war-related risks. The private sector is also involved. Marsh McLennan’s unity facility, for example, is a $50 million war risk insurance program covering ships transporting grain through the Black Sea. It’s one of the main reasons Ukraine’s Black Sea export routes have now expanded to prewar levels, hitting 13 million tons of exports in April alone.  

But more must be done. Ukraine’s insurance premium market is just 3 percent—just 3 percent—of Poland’s. We are pushing for new lines of war risk insurance, for energy, cargo, land transportation, and elsewhere. In fact, in Berlin we plan to announce ways to put new capital to work to provide war risk insurance for small- and medium-sized businesses. We all know that without a robust insurance market, robust investment is not possible.  

Finally, we have to tap into new sources of capital that can finance the public and private sector reconstruction. On the private sector side, we must find ways to unlock more catalytic and working capital. The thirst is there. One major American bank has added seventy-five new business clients, a 15 percent increase in its client base, since February of 2022. But Ukraine needs so much more. To meet the needs, there needs to be more lending through banks, through the international financial institutions, and elsewhere at interest rates that recognize the risk but yet also make investment profitable.  

In addition, for Ukraine’s reconstruction there’s one crucial step that must be taken as a moral, legal, and practical matter. Russia must be made to pay. Our Congress has given us the power to seize Russian assets in the United States, understanding what Putin—understanding that what Putin has destroyed, Russia should and must pay for the rebuilding. And we intend to use this power, working with the G-7 by pulling forward profits and interest on frozen assets, which is a first step. This can and will unlock billions of dollars and send a powerful message to Putin that time is not on his side. So taken together, these five efforts can provide the basis for Ukraine’s economic recovery and its economy of the future. These are workstreams on which we must focus in Berlin. They are essential to fortify Ukraine’s remarkable and underappreciated un-breakability.  

So as I close, I want to talk about the story of a company called Esper Bionics that makes artificial limbs. And I visited them two weeks ago and Kyiv. There’s a Ukrainian soldier named Valera Kucherenko, who came for Esper’s help after he lost both of his hands to a grenade attack last October. They gave him two bionic hands. And Valera has said that he was glad the prosthetics were made in a way that would allow him to return to the army to continue fighting for his country. When Ukrainians lose their hands, they build new ones and return to fight. And that is what is happening all over the country across the economy at this very moment. It’s just incredible.  

That is what I have seen personally over and over again. So when we say that Ukraine can and will win with our help, it’s Valera that I think about. The country is literally full of Valeras, not grabbing headlines but using every ounce of their determination and ingenuity to fight and to win. And we must help them. Thank you very much.

Source: https://www.cfr.org/event/ukraines-economic-recovery-remarks-and-conversation-penny-pritzker