Joint Declaration of Support for Trade Finance in Ukraine by U.S. International Development Finance Corporation (DFC), British International Investment (BII), Multilateral Investment Guarantee Agency (MIGA), and International Finance Corporation (IFC)
We, the undersigned, support the resilience of Ukraine’s private sector in the face of Russia’s invasion. With these signatures, DFC, BII, and MIGA indicate our intent to demonstrate that support by unlocking trade into Ukraine, in partnership with IFC’s Global Trade Finance Program (GTFP).
Russia’s invasion of Ukraine triggered a massive social, humanitarian, and economic crisis. The effects of the invasion include disruptions to cross-border trade needed for inputs to businesses and essential goods for the population. Banks in Ukraine have been resilient in continuing to finance cross-border trade but require reliable de-risking instruments to maintain access to finance. Their partner banks outside Ukraine face challenges in taking on Ukrainian risk and have reduced their exposure. As a result, access to the international trade finance market for Ukrainian businesses has significantly deteriorated.
To keep trade lines open in support of Ukraine’s cross-border trade, DFC, BII, and MIGA intend to risk-share IFC’s trade exposure, which will increase the capacity of the GTFP in Ukraine from $200 million to almost $300 million. With this support, IFC and its partners will be in a position to provide access to financing for as much as $1 billion of imports and exports over the next three years. BII and DFC intend to provide $25 million and $50 million, respectively, to support trade flows of critical goods, including food. In addition, MIGA has approved $20 million to support trade finance guarantees.
IFC’s GTFP facilitates trade finance transactions between confirming banks and issuing banks in emerging markets by offering confirming banks partial or full guarantees covering payment risk by the issuing banks. The Partnership is intended to allow DFC, BII, MIGA, and IFC to increase trade finance availability in the country and contribute to enhanced resilience in the local economy.
With our signatures below, we confirm our intent to collaborate in relation to this platform, which will deliver essential goods to the Ukrainian people and support trade, which plays a critical role to strengthen resilience in the country. DFC, BII, MIGA and IFC stand by Ukraine.
Nick O’Donohoe, CEO, BII
Scott Nathan, CEO, DFC
Hiroshi Matano, EVP, MIGA
Makhtar Diop, MD, IFC
June 21, 2023. Ukraine Recovery Conference, London