Overview of KUKE
KUKE (Korporacja Ubezpieczeń Kredytów Eksportowych) has positioned itself as a pivotal player in the support of Ukraine’s reconstruction and economic modernization efforts. As an export credit agency, KUKE's mission involves providing insurance for Polish exports and investments, with a particular emphasis on mitigating the risks associated with international trade and investment. Their proactive stance has made them a leader in facilitating safe and sustained economic engagement in Ukraine, especially amid the ongoing war.
Strategic Initiatives and Agreements
KUKE’s engagement in Ukraine is marked by a series of strategic initiatives and international agreements aimed at bolstering trade and investment. At the Ukraine Recovery Conference held in Berlin, KUKE joined leading export credit agencies and investment insurers in signing a Memorandum of Understanding (MoU). This MoU focuses on supporting Ukraine's reconstruction by establishing international guarantee mechanisms, promoting Ukraine as an attractive trade and investment partner, and pioneering the country's economic, social, infrastructural, and ecological recovery.
The MoU included key global entities such as Atradius Dutch State Business (Netherlands), EDC (Canada), EGAP (Czech Republic), EKN (Sweden), Euler Hermes (Germany), EIFO (Denmark), Finnvera (Finland), PricewaterhouseCoopers (Germany), NEXI (Japan), SACE (Italy), UKEF (UK), and USEXIM (USA). This broad coalition underscores the international community’s commitment to supporting Ukraine through shared expertise and best practices in export finance and investment insurance.
Financial Instruments and Insurance Products
KUKE offers a range of financial instruments and insurance products specifically designed to facilitate Polish companies' involvement in the Ukrainian market:
1. Receivables Coverage: This product provides short-term financing for Polish exports to Ukraine, ensuring that Polish exporters are protected against the risk of non-payment by Ukrainian buyers.
2. Investment Coverage: KUKE offers long-term financing for Polish companies investing in Ukraine. This includes greenfield (new) and brownfield (existing) investments, as well as mergers and acquisitions (M&A). The coverage protects against political risks, including war, ensuring that Polish investments are safeguarded despite the volatile environment.
3. Infrastructure Project Coverage: KUKE supports long-term financing (up to 10 years) for infrastructure projects in Ukraine. This includes projects initiated by the Ukrainian government, municipalities, and private entities where Polish companies participate. The aim is to facilitate the reconstruction of critical infrastructure such as energy and transportation networks.
War Risk Insurance and Transport
Poland has pioneered war risk insurance for the transport industry, a significant development given the ongoing conflict in Ukraine. KUKE is set to be the first institution to reinsure casco and cargo cover for Polish carriers, addressing the inability to insure transport risks commercially. This initiative is pending European Commission consent and reflects KUKE’s commitment to enabling Polish companies to continue their operations in Ukraine despite the risks.
Comprehensive Support Programs
KUKE has developed a comprehensive support program for Polish companies involved in the Ukrainian market, focused on three main pillars:
1. Supporting Current Operations:
- KUKE continues to insure the export of goods to Ukraine, maintaining this support even amid the war. This is a unique stance among export credit agencies, highlighting KUKE’s dedication to sustaining trade.
- This pillar includes the aforementioned war risk insurance for transport, ensuring that Polish companies can manage the logistics of their operations in Ukraine.
2. Investment Insurance Against Political Risk:
- KUKE provides insurance for Polish investments in Ukraine against political risks, including war. This product ensures that investment expenditures are covered, encouraging Polish companies to engage in the Ukrainian market.
- The insurance also extends to guaranteeing Polish banks' financing for these investments, facilitating project finance and acquisitions.
- KUKE supports foreign investors in establishing production or branches in Poland to operate in Ukraine, providing guarantees for these investments and their subsequent exports.
3. Reconstruction and Modernization:
- KUKE’s support extends to financing projects involving Polish enterprises in Ukraine’s reconstruction. This includes infrastructure projects and the construction of public utility facilities.
- The involvement of Polish companies in these projects is mandated, with at least 30% of the work and supplies originating from Poland.
- This support covers a wide range of industries, from service providers to construction firms, ensuring a comprehensive approach to Ukraine’s recovery.
Conclusion
KUKE’s robust suite of financial instruments and insurance products underscores its commitment to supporting Ukraine's reconstruction and modernization. By providing comprehensive coverage for Polish exports and investments, particularly in a high-risk environment, KUKE not only facilitates economic engagement but also fosters resilience and growth in the Ukrainian economy. Through strategic international cooperation and innovative insurance solutions, KUKE plays a crucial role in rebuilding Ukraine and promoting it as a viable and attractive trade and investment partner.
Link to website:
Ukraine: export, investments, reconstruction - KUKE | Credit insurance, gurantees and financing
