MIGA Backs Industrial Park in Ukraine

The Multilateral Investment Guarantee Agency of the World Bank (MIGA) has issued guarantees of up to $9.2 million in total to UIPH Ukrainian Industrial Property Holding Limited of Cyprus for its investments in the form of equity and a shareholder loan into the M10 Industrial Park Project against the risk of war and civil disturbance for up to 10 years.

The guarantees provide urgent support for the construction and operation of a warehouse facility and supporting infrastructure in the M10 Industrial Park in Lviv, located in western Ukraine, which will offer new industrial and logistics warehouse space essential for sustained economic activities during both the war and post-war reconstruction.

“We are proud to support Ukraine at a time of extreme economic and humanitarian disaster resulting from the Russian invasion,” – said Hiroshi Matano, MIGA Executive Vice President. – “We are committed to facilitating foreign direct investment to the country and building a momentum for post-war rebuilding efforts”.

The project is expected to support Ukraine’s economic growth during the challenging period and create new jobs and generate tax revenue for the government. Moreover, it will provide an alternative for displaced firms to continue their operations during the war. The facility will obtain an international green building certification for its environmental sustainability and energy efficiency.

“We are very grateful to MIGA for supporting Ukraine and our greenfield investment in M10 Lviv Industrial Park,” – said Tomas Fiala, CEO at Dragon Capital, which owns 65% of UIPH. – “Wider availability of guarantees is key to increasing foreign direct investments in Ukraine during the ongoing war. Also, we stress the important role of the Office of the President of Ukraine and the Government of Ukraine in maintaining stable macroeconomic conditions and creating a favorable environment for new investments”.

The MIGA guarantees demonstrate MIGA’s continuous commitment to the reconstruction effort in Ukraine and provides an important signal to international investors. They are aligned with two of MIGA’s strategic priorities: supporting private sector-led projects in fragile and conflict-affected situations and climate finance.

“The recent investment guarantees provided by MIGA represent a significant positive signal for new potential investors considering investments in Ukraine,” – said Yulia Svyrydenko, First Deputy Prime Minister of Ukraine and Minister of Economy. – “With the invaluable support of our international partners, there are many opportunities to develop processing businesses and allocate value chains for full-fledged production in different regions in Ukraine. We continue to support and facilitate the war risk insurance programs for the private sector in Ukraine to cover investment risk and believe that in tight cooperation with donors and the international financial community, many domestic and foreign companies will be able to apply and get new guarantees”.

MIGA’s Support for Ukraine’s Reconstruction and Economy (SURE) trust fund is contributing $4 million toward the project. Given the heightened risks of operating in Ukraine during the ongoing war, MIGA established the SURE trust fund to enable its guarantee issuance in Ukraine. MIGA blends donor financing from the trust fund with risk exposure on its own books, and crowds in public and private reinsurance where available, to deploy guarantees in support of Ukraine.

Info. 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 $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. 

UIPH (Ukrainian Industrial Property Holding Limited) is an investment holding company that specializes in commercial real estate investments in Ukraine. Its shareholders are Dragon Capital Investments Limited, a member of the Dragon Capital group of companies, with 65%, and the EBRD, with 35%. Dragon Capital is a leading Ukrainian group of companies in the field of investment and financial services. The company has a decades-long track record of private equity investments in leading manufacturers of goods and service providers in Ukraine as well as in landmark residential and commercial real estate projects. Dragon Capital manages a commercial real estate portfolio that includes 30 properties in the office, retail and logistics sectors with a total area of over 650,000 sq. m.