Funding and risk mitigation in Ukraine

Procurement processes and compliance requirements in Ukraine often depend on the funding source (for example, a Ukrainian public budget, an international financial institution, or a donor program). For planning purposes, it is useful to identify the funding source early because it can affect tender rules, documentation requirements, and payment arrangements.

Before pursuing a tender, consider which Canadian instruments may help manage risk, for example:

• Export Development Canada (EDC) insurance
• EDC Ukraine
• bonding and guarantees
• CanExport SMEs
• where relevant – Canada Commercial Corporation (CCC) government‑to‑government contracting

Then confirm the buyer’s funding source to match it to the relevant procurement portal and contract rules, for example: 

• Ukrainian public budget
• international financial institutions (IFI)
• European Union (EU) facility
• other donor funding

Export Development Canada (EDC): Canada’s primary de-risking partner for exports and projects in Ukraine (trade credit insurance, bonding, guarantees, and structured financing support). EDC classifies Ukraine as “High Risk” within its Country Risk Quarterly framework (reflecting severe political, economic, and commercial volatility). Despite this classification, EDC maintains a dedicated risk envelope to support Canadian trade and investment in Ukraine.

• Credit risk insurance: Protection against non-payment by Ukrainian buyers. EDC’s Select Credit Insurance and Portfolio Credit Insurance can help protect against buyer default, currency conversion restrictions, and sovereign non-payment (subject to policy terms).
• Financing guarantees: EDC can guarantee loans to Canadian exporters for large orders to Ukraine.

CanExport SMEs (Trade Commissioner Service): Cost-sharing grants that can subsidize early market-entry costs (for example, travel, market research, translation/marketing adaptation, and specialized legal/tax advice).

Canadian Commercial Corporation (CCC): A sovereign-backed government-to-government (G2G) contracting pathway that can reduce counterparty/payment risk when selling to Ukrainian public-sector buyers (most relevant for defence and major public procurement). Given the reality that military products accounted for more than half of the total Canadian export value to Ukraine in recent years, the role of the CCC is crucial. The Corporation offers an International Prime Contracting service that enables G2G contracting with Ukrainian public-sector buyers, including (where applicable) the Government of Ukraine and the Ministry of Defence.

Recent deployments publicly reported in 2025–2026 include CCC-managed procurements of medium and large caliber ammunition for the Armed Forces of Ukraine (CAD 89 million), facilitation of a CAD 100 million Canadian contribution to the Czech Ammunition Initiative, and management of contracts for flight simulators and specialized military equipment.

European Union (Ukraine Facility): The EU’s EUR 50 billion (approximately CAD 79.5 billion) Ukraine Facility (2024 to 2027) supports macroeconomic stability and long-term recovery projects. It also links funding to reforms (for example, regulatory, judicial and anti-corruption reforms) that align Ukraine more closely with EU standards.

The World Bank: The World Bank manages donor funding through mechanisms such as the Ukraine Relief, Recovery, Reconstruction, and Reform Trust Fund (URTF) and the Financial Intermediary Fund (FIF). These funds finance projects from emergency energy repairs to healthcare modernization, using the Bank’s procurement rules. 

• The International Finance Corporation (IFC) (World Bank Group): Initiatives announced at URC 2025 focus on private-sector financing, technology and energy projects, and partnerships to strengthen resilience.
• The European Investment Bank (EIB)/partners: The Ukraine FIRST initiative aims to accelerate large-scale infrastructure project preparation and delivery.
• The European Bank for Reconstruction and Development (EBRD): Record financing of EUR 2.9 billion (approximately CAD 4.6 billion) in 2025 (second consecutive record year), with a strong focus on the private sector.

The United States (U.S.)–Ukraine Reconstruction Investment Fund (URIF): Is a joint investment vehicle established to mobilize both public and private capital for Ukraine’s reconstruction and long-term economic resilience. Launched with USD 150 million (approximately CAD 205 million) in equal contributions from the U.S. and Ukrainian governments, the fund became operational in December 2025 and is preparing its first investments for 2026.

URIF is governed by the U.S. International Development Finance Corporation (DFC) and Ukraine’s State Agency for Public Private Partnerships, who serve as Limited Partners. Its mandate is to attract additional co-investment across five priority sectors, with a focus on natural resources, infrastructure, energy, and technology. The fund also holds investment rights for major subsoil and infrastructure projects, along with market-based offtake rights related to natural resource development.

URIF has generated significant early interest, receiving over 150 project proposals, with more than 60 projects under active review, illustrating strong market momentum and investor appetite for Ukraine’s recovery.

The EU Flagship Fund for the Reconstruction of Ukraine is a major Team Europe initiative launched in July 2025 to mobilize large scale private capital for Ukraine’s post war recovery. By leveraging public contributions from the European Commission, several EU member states, and the European Investment Bank, the fund aims to attract private investment into priority sectors, including:

• energy
• infrastructure
• digital modernization
• industrial upgrading
• critical raw materials
• dual use production

Described by the European Commission as the world’s largest equity fund dedicated to reconstruction, it is targeting an initial closing of up to €500 million (approximately CAD 794.8 million) by 2026. The fund serves as a cornerstone mechanism to accelerate Ukraine’s economic recovery and advance its path toward EU integration.

In a war zone, the main barrier to private investment is the risk of loss from hostilities or political actions (such as expropriation). For major investments or European Political Community (EPC) contracts, build a risk-transfer package (for example, insurance and guarantees) from the start.

Fairfax Financial Holdings group (ARX): Offers war‑risk insurance for certain commercial real estate and investments in Ukraine. Reported coverage limits are up to USD 50 million (approximately CAD 68.3 million) per risk, and coverage can include damage from drones and missiles and debris from air‑defence systems (subject to underwriting and exclusions).

EBRD and Aon facility: Launched a EUR 110 million (approximately CAD 174.9 million) Ukraine Recovery and Reconstruction Guarantee Facility to increase war‑risk reinsurance capacity. It allows Ukrainian insurers to issue policies that cover war‑related property damage for certain manufacturing and logistics assets.

The Multilateral Investment Guarantee Agency (MIGA) (World Bank Group): Provides political risk insurance and, for eligible investments and debt financing, war‑risk coverage (for example, expropriation, breach of contract, and war and civil disturbance). MIGA’s SURE Trust Fund supports war‑risk insurance that can help unlock credit financing. Reported coverage can be up to 90% of the invested capital (terms apply).

U.S. International Development Finance Corporation (DFC): Can finance eligible projects in Ukraine with foreign investment, including in energy, agriculture, and IT. Direct loans and guarantees are typically in the USD 1 million (approximately CAD 1.4 million) to USD 1 billion (approximately CAD 1.4 billion) range per project (subject to eligibility and approvals). 

Ukraine Export Credit Agency (ECA): Government decisions expanded the ECA’s ability to insure certain military and political risks for investments in Ukraine, including for some foreign investors (subject to eligibility). A state compensation program effective January 1, 2026, supports Ukrainian manufacturers and exporters in high‑risk regions by compensating war‑related damage to insured property up to UAH 10 million (approximately CAD 315,000) and reimbursing war‑risk insurance premiums above a 1% tariff (capped at UAH 1 million per year (approximately CAD 31,500)).