Belgium Contributes to MIGA’s Trust Fund to Support Ukraine
Washington, October 13, 2023 – The Multilateral Investment Guarantee Agency of the World Bank (MIGA) announced today that the Federal Public Service Finance of Belgium is contributing €1 million toward the Support to Ukraine’s Reconstruction and Economy (SURE) Trust Fund, launched by MIGA in February 2023.
Addressing the enormous impact of the ongoing Russian invasion of Ukraine requires both direct support to the country’s government and facilitation of high-leverage solutions. These solutions should enable private sector investment to address the crisis, including reconstructing infrastructure and preserving economic activity. The SURE Trust Fund allows MIGA to provide trade finance guarantees, insurance on bank reserves during the conflict, and political risk insurance to support reconstruction after the war, meeting current and anticipated needs.
“MIGA greatly appreciates the government of Belgium’s contribution to the SURE Trust Fund,” said Hiroshi Matano, Executive Vice President of MIGA. “We have already started providing support to Ukraine, applying our experience in fragile and conflict-affected countries. Belgium’s support will help continue humanitarian and economic relief efforts during the conflict. We also look forward to helping Ukraine rebuild.”
Belgium has historically been an active participant in international development efforts. Its long-standing relationship with the World Bank includes serving as a founding member of the International Bank for Reconstruction and Development. The country is also a member of the International Development Association, the International Finance Corporation, the International Centre for Settlement Disputes, and MIGA. The Federal Public Service Finance of Belgium, part of the country’s federal government, manages its finances and taxation.
“Belgium stands in solidarity with Ukraine and strongly supports MIGA’s contribution towards catalyzing private sector investment in the country,” said Vincent Van Peteghem, Deputy Prime Minister, Minister of Finance and World Bank Governor for Belgium. “MIGA’s guarantees are designed to support the survival of Ukraine’s private sector during the ongoing invasion and necessary private sector engagement during post-conflict reconstruction. Belgium strongly values MIGA’s expertise in mobilizing private capital and operation in the region, as well as in other fragile and conflict-affected countries.”
MIGA has tapped the SURE Trust Fund to issue guarantees to multiple projects. In FY23, MIGA increased the guarantee to ProCredit Holding AG and Company KGaA of Germany (Pro Credit) originally issued in 2020 to support the bank’s financing activities for small businesses and the agricultural sector in the country. MIGA’s capital optimization guarantee reduced to zero the risk weight applicable to the mandatory reserves, enabling ProCredit to use the freed-up capital to support its operations in Ukraine.
MIGA has issued $195 million in political risk insurance guarantees since the Russian invasion began last year. These guarantees serve as a key risk mitigation tool for banks, ensuring the continuity of bank lending to the real sector companies during war time. MIGA recently announced guarantees of up to $9.1 million to UIPH Ukrainian Industrial Property Holding Limited of Cyprus against the risk of war and civil disturbance to support the construction and operation of a warehouse facility and related infrastructure in western Ukraine. The facility will offer new industrial and logistics warehouse space essential for sustained economic activities during both the war and post-reconstruction.
MIGA has already allocated $23 million that had been contributed by Japan to the projects insured in 2023. Norway, and the UK have made additional pledges toward SURE’s $300 million overall target.
MIGA was created in 1988 as a member of the World Bank to promote foreign direct investment in emerging economies by helping to mitigate the risks of restrictions on currency conversion and transfer, breach of contract by governments, expropriation, and war and civil disturbance; and offering credit enhancement to private investors and lenders. Since its creation, MIGA has issued over US$76 billion in guarantees across 123 developing countries, supporting more than 1,000 projects. Over the past decade, MIGA’s guarantees have generated more than 156,000 jobs in developing countries.
Subhash Ghimire, firstname.lastname@example.org
For more information on our Ukraine response, please visit: https://www.miga.org/migas-ukraine-response