If War Destroys a Factory, Who Pays? Political Risk Insurance for Investment in Ukraine

When a foreign company owns a factory or warehouse in Ukraine and a missile strike halts its operations, who bears the loss? For cross-border investment, dedicated insurance has been used to guard against “political risk” — war, expropriation, restrictions on remittances, and the like.

The World Bank Group’s Multilateral Investment Guarantee Agency (MIGA) wrote, in a November 2023 announcement, that because the war continues, private insurers remain unable to offer political risk insurance in Ukraine. Below, this article lays out, from each agency’s published materials, how public agencies are dividing up this role. Read every figure together with the date of the announcement it came from.

MIGA — the “SURE Fund” That Japan Was First to Fund

MIGA is an agency established in 1988 as part of the World Bank Group, providing investors and lenders with guarantees that mitigate the risks of currency inconvertibility and transfer restrictions, government breach of contract, expropriation, and war and civil disturbance (per MIGA’s own description of itself in its press releases).

On February 23, 2023, one year to the day since Russia’s full-scale invasion of Ukraine began, MIGA announced the launch of a trust fund for Ukraine, “SURE” (Support for Ukraine’s Reconstruction and Economy). The first contributor was Japan, with $23 million. MIGA said it expected the fund to eventually reach $300 million (though MIGA’s fund page itself gives the fund’s establishment as March 2023).

The fund’s use is described as having two stages. During the war, it covers guarantees for trade finance supporting imports of medicine, food, fuel, and fertilizer, and insurance on the reserve deposits of subsidiaries of foreign banks operating in Ukraine, among other things. After fighting ends and conditions stabilize, it will issue political risk insurance to international lenders and investors for reconstruction projects in sectors such as transport, housing, and energy.

As of May 2024, MIGA wrote that Japan’s contribution was the largest among contributors to the SURE fund. In its April 2026 announcement, an official from Japan’s Ministry of Finance stated that Japan is MIGA’s second-largest shareholder and the largest contributor to MIGA’s trust funds.

On its fund page, MIGA gives track-record figures as of June 30, 2025. Funds allocated from the SURE fund total $90.3 million, MIGA guarantees issued using them total $326.6 million, and private capital mobilized totals $324.2 million. The April 2026 announcement states that, across Ukraine as a whole, new guarantees issued since the full-scale invasion began in February 2022 reached $561 million.

Individual examples have also been published. In September 2023, MIGA issued a guarantee of up to $9.1 million, covering war and civil disturbance risk for up to 10 years, for an equity investment and shareholder loan by Cyprus-based UIPH into a Ukrainian industrial park (M10 Industrial Park). In its announcement of Norway’s contribution, MIGA explains the mechanism: by using the fund’s money for the “first-loss” portion, it can issue insurance at premiums that are affordable while still matching the risk.

DFC — the U.S. Development Finance Corporation, and Reinsurance as a Tool

Political risk insurance from the U.S. International Development Finance Corporation (DFC) covers losses from currency inconvertibility, expropriation, and political violence including terrorism (per DFC’s own announcements).

On June 12, 2024, to coincide with the Ukraine Recovery Conference held in Berlin, DFC announced four political risk insurance deals for Ukraine totaling $357 million. The breakdown was $150 million for an existing agricultural export business, $152 million for a Ukrainian manufacturing company, $5 million for a project supporting higher education for Ukrainian students, and a $50 million reinsurance facility. DFC states that it is not naming some of the counterparties to these deals because of the risk of military retaliation. The same announcement states that DFC’s transactions in Ukraine since the full-scale invasion have reached $848 million, and its overall Ukraine portfolio has reached $1.6 billion.

This reinsurance facility was also taken up in an announcement made in Warsaw on November 14, 2024. The broker was the U.S. insurance broker Aon, and the recipient was ARX, a Ukrainian insurer under Fairfax Financial. DFC states that this facility enables ARX to expand war risk insurance for companies operating in Ukraine, making possible more than $200 million in new coverage for static assets. This is a use of the tool in which the public agency does not underwrite everything directly but instead supports, from behind, a domestic insurer’s ability to sell insurance.

On June 21, 2023, DFC and MIGA agreed to set up a consultative group on political risk insurance for Ukraine. On June 25, 2026, at the recovery conference held in Gdańsk, Poland, they signed a cooperation agreement to build a political risk insurance framework for investments by the U.S.-Ukraine Reconstruction Investment Fund (URIF). URIF is a fund the two countries agreed to establish in April 2025, according to the U.S. Treasury Secretary, and, per DFC’s announcement, its first investment was in a Ukrainian company with autonomous drone-control technology.

NEXI — Japan’s Trade Insurance Has Not Stopped Underwriting

The public insurer used by Japanese companies is Nippon Export and Investment Insurance (NEXI). NEXI’s overseas investment insurance covers losses from “extraordinary risk” — expropriation, war, revolution, and terrorism, and restrictions on remittances — affecting shares, real estate, and other assets Japanese companies hold abroad. According to NEXI’s guide (published April 2026), the insured percentage (coverage ratio) is chosen at 95% or below, or 100%, and the insurance period for a new contract is, in principle, set at between 2 and 30 years.

NEXI wrote, in an announcement of February 20, 2024, that it has kept its underwriting policy for Ukraine open even since Russia’s invasion of Ukraine in February 2022, and has continued underwriting export and investment insurance. On NEXI’s country underwriting policy page, as of September 2026, Ukraine’s country category is H, the last of the eight grades from A to H (per the table current as of September 14, 2026). Even so, all three types of overseas investment insurance are listed as “available for underwriting.” Some trade insurance carries conditions such as a contract amount capped at 500 million yen and a term of up to 12 months.

As for facilities, to coincide with the Japan-Ukraine Conference for Promotion of Economic Reconstruction on February 19, 2024, NEXI set an underwriting facility of 150 billion yen for overseas investment insurance (over five years, through 2029) and 50 billion yen for short-term trade insurance (over two years, through 2026). NEXI had also set up short-term trade insurance facilities for Ukraine of 30 billion yen over two years each in 2014 and 2016. Where this fits within the conference as a whole is summarized in our article following up on the Conference for Promotion of Economic Reconstruction.

At the same conference, NEXI signed a memorandum of cooperation with Ukraine’s export credit agency, ECA Ukraine, pledging cooperation on information exchange and reinsurance. At the Berlin recovery conference in June 2024, it also signed a memorandum of cooperation, together with a total of 13 agencies including the U.S. Export-Import Bank, the UK Export Finance, and Germany’s Euler Hermes, to support Ukraine’s recovery through export credit and direct investment support.

Distinctions to Keep in Mind When Reading These Figures

• The amount contributed to a fund and the amount of guarantees issued are different things. MIGA’s SURE fund uses contributed money to cover the first portion of any loss and issues guarantees several times that amount; MIGA gives its leverage ratio as of June 2025 as about 1 to 3.5.
• A “facility” and “actual usage” are also different things. NEXI’s 150 billion yen and 50 billion yen figures are set as underwriting ceilings; how much has actually been used has not been published.
• Whether insurance is granted is decided case by case. Each agency’s facilities and policies do not promise that any particular investment will be covered.

These mechanisms for attracting investment in the middle of a war are different from government subsidies or loans; they are tools that settle in advance who pays if a loss occurs. Even where the published facility is large, how much of it has actually translated into investment needs to be checked against separate figures.