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Contingent Liability Notification: Ukraine Guarantees
12 October 2022
Type
Written Ministerial Statement
Department
Foreign, Commonwealth and Development Office
At a Glance
Issue Summary
The Foreign, Commonwealth and Development Office (FCDO) is undertaking two contingent liabilities to support Ukraine's economic stability following Russia’s invasion.
Action Requested
The FCDO is presenting a Departmental Minute to Parliament detailing new guarantees worth €54m (£47m) for Ukrenergo and €527m (£460m) for the Government of Ukraine, with maturities of 5 years and 18 years respectively. This statement has been made due to urgency and unexpected parliamentary disruptions.
Key Facts
- FCDO is undertaking two contingent liabilities in excess of £300,000.
- The first guarantee supports EBRD lending to Ukrenergo with an expected maximum exposure of €54m (£47m).
- The second guarantee supports World Bank lending directly to the Government of Ukraine with a maximum exposure of €527m (£460m).
- Guarantees are denominated in the currency Ukraine decides to borrow in.
- UK payout is triggered if Ukrenergo or the Ukrainian government miss a repayment by 180 days.
- Maturity for EBRD guarantee is 5 years; World Bank guarantee is 18 years.
- HM Treasury approved both guarantees and expedited notification process.
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