Ukraine Subsidizes War Risk Insurance: 2026 Update for Defence Manufacturers

Opening export channels is not the only instrument for supporting the defence industry. The Ministry of Economy has implemented a war risk insurance subsidy program: when commercial insurance costs are high, the enterprise pays only 1% of the insured sum, while the state covers the difference up to a limit of UAH 3 million per year. The goal is to remove the primary barrier for private foreign investment in production facilities located within Ukraine.

As of May 2026, the program has moved from pilot status to active implementation. The Export Credit Agency (ECA) has already issued its first payouts to businesses, demonstrating the practical viability of the mechanism. With over 40 applications processed for assets worth billions of hryvnias, the program is becoming a cornerstone of the 'Made in Ukraine' policy framework.

Context: Why This Matters Now

• The state-backed mechanism under Resolution No. 1541 has successfully reduced effective insurance costs for early participants from over 4% to approximately 1.2%.
• Production surplus in certain weapon categories remains high, indicating that while capacity exists, capital is required for scaling.
• The integration of state subsidies with international reinsurance facilities, such as the EBRD's €110 million guarantee line, provides a more stable environment for long-term defence investment.

Integrating Insurance Subsidies with Export Cases

For a manufacturer planning exports or a joint venture with a foreign partner, subsidized insurance is a compelling argument in negotiations; it lowers the total project cost and the investor's risk premium. However, the terms of participation in the program, as well as the structure of the investment agreement itself, require careful legal review to ensure compliance with both ECA requirements and international export control standards.

Investors prioritize three factors: capital protection, regulatory predictability, and agreement integrity. Insurance subsidies address the first—the rest is secured by a robust legal structure.

Legal Support for Defence Investment Agreements

Global Miltech Legal structures transactions involving foreign investment in defence manufacturing, ranging from partner compliance checks to technology protection clauses. If you are planning to raise capital for an export contract, contact us for a free initial case assessment.