• 02/03/2024 21:34

Ship insurance in the Black Sea: Two state banks issued letters of credit for $20 million

State Ukreximbank and Ukrgasbank, at the request of the Export Credit Agency, issued letters of credit in the amount of $20 million as part of an important government project aimed at restoring the ability to insure ships against war risks. This is stated in the bank's message.

Ship insurance in the Black Sea: Two state banks issued letters of credit for $20 million

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Ukrgasbank and Ukreximbank issued letters of credit in favor of the British policyholder. The applicant for the letter of credit was ECA. Duration – up to 3 years, amount – 20 million US dollars.

Export insurance

The war had a negative impact on the insurance industry in Ukraine. Insuring grain exports from Ukraine has become much riskier since Russia finally withdrew from the UN-brokered “grain agreement” in July 2023, which in turn increased the cost of insurance for shipowners.

In November 2023, the Government of Ukraine, together with the British government and a pool of 14 insurance companies from Britain, managed to create a special program (the so-called “Unity” project) aimed at providing shipowners with the opportunity to obtain affordable insurance coverage for the transportation of grain and other grains exported from Ukraine . goods by sea from Ukraine.

Read: Ukraine expands available war risk insurance instruments for exporters

The scheme, in particular, aims to provide shipowners with charterers with war risk insurance in the absence of safe corridors for ships entering and leaving the Black Sea ports.

The implementation of such an important initiative for the Ukrainian economy was made possible thanks to close cooperation between the Ukrainian government, the international company Marsh McLennan, PJSC Export-Credit Agency”, Ukreximbank and Ukrgasbank.

Read: War risks insurance. Broker Marsh McLennan announced cooperation with the government of Ukraine


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