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Ukraine: World Bank Agrees To Guarantee For Export Agency

Washington, 19 March 1997 (RFE/RL) - The World Bank has agreed to provide a $120 million political risk guarantee to a new Ukrainian export financing agency to support the development of private sector agricultural and food processing enterprises.

The Pre-Export Guarantee Facility (PGF) was set up by the Ukrainian government to provide protection for foreign investors putting money into firms producing exportable agricultural goods without creating long-term government debt.

The investors must assume the normal risks of a business venture, but are insured by the PGF against political and government performance risks. The bank, for an annual fee, is giving the PGF an underlying guarantee to strengthen the agency's stability.

The bank says the program will help the private sector channel its resources to commercially viable enterprises, restore employment in the sector while reforms are taking hold, and help establish a record of political stability to improve Ukraine's reputation in foreign financial markets.