British Prime Minister Rishi Sunak announced a new framework for war risk insurance on Wednesday, aimed at helping businesses invest in Ukraine.
“This is a huge step forward towards helping insurers to underwrite investments into Ukraine, removing one of the biggest barriers and giving investors the confidence they need to act,” Sunak said at the Ukraine Recovery Conference in London.
Ukraine called on Wednesday for Western countries to pledge over $6 billion more to help the country rebuild over the next 12 months, saying Russia’s war meant Kyiv was facing the largest reconstruction project in Europe since World War Two.
At a conference in London where Britain, the United States and the European Union pledged billions of dollars in additional help, Ukraine said it needed yet more capital and also commitments to specific projects to not only recover but to develop into a powerful member of the Western world.
Addressing the key difficulty for most companies wanting to invest in Ukraine – insurance against war damage and destruction – Sunak announced the London Conference Framework for War Risk Insurance, which could pave the way for derisking investment, though he was light on details.
“Together with our allies we will maintain our support for Ukraine’s defence and for the counteroffensive, and we’ll stand with Ukraine for as long as it takes as they continue to win this war,” Sunak told the conference, which brought together more than 1,000 public and private sector decision makers.
He said the London Conference Framework was “a huge step forward towards helping insurers to underwrite investments into Ukraine, removing one of the biggest barriers and giving investors the confidence they need to act”.
Sunak unveiled measures including $3 billion of additional guarantees to unlock World Bank lending, while European Commission President Ursula von der Leyen said the EU would provide Ukraine with 50 billion euros for 2024-27.
U.S. Secretary of State Antony Blinken offered $1.3 billion in additional aid, including $520 million towards helping overhaul its energy grid.
German Foreign Minister Annalena Baerbock said Berlin was offering an additional 381 million euros in humanitarian assistance in 2023.
But Zelenskiy, speaking via video link, said Ukraine needed more targeted help in “real projects” that would spur growth in an economy he said had moved far away from the oligarchic model of Ukraine’s immediate post-Soviet era.
Ukraine is seeking up to $40 billion to fund the first part of a “Green Marshall Plan” to rebuild its economy, including developing a coal-free steel industry, a senior Ukrainian official said before the conference.
The total bill will be huge, with Ukraine, the World Bank, the European Commission and the United Nations estimating in March that the cost was at $411 billion for the first year of the war. It could easily reach more than $1 trillion.
Western officials hope the conference will encourage the private sector to harness its resources to help speed Ukraine’s reconstruction by investing in small and medium-scale projects. Sunak said more than 400 companies from 38 countries had signed up to the Ukraine Business Compact, a statement of support for Ukraine’s recovery.
But companies might still want to know whether nations can agree on a way of providing insurance against war damage and destruction. It was not clear how far the launch of the London Conference Framework for War Risk Insurance would help ease such concerns.
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