Aon and the European Bank for Reconstruction and Development (EBRD) have outlined a new €110 million ($180.5 million) facility to provide reinsurance capacity for war-related risks in Ukraine.

The EBRD arrangements will support global reinsurance companies through a guarantee covering losses on specific war-related risks underwritten by Ukrainian insurers.

Initially, the scheme will cover inland cargo, motor vehicle damage and railway rolling stock, with the flexibility to expand to a broader range of assets based on evolving market demand.

MS Amlin is the first international reinsurance partner to join the facility, while insurance companies INGO, Colonnade and UNIQA are among local participants that will drive take-up in the market.

EBRD president Odile Renaud-Basso says it is a milestone for the country that will help private sector reinsurers re-engage on Ukrainian war risk and build a resilient local insurance market.

“This is crucial to giving businesses confidence that their assets are protected, which in turn will unlock and accelerate investment in Ukraine,” he said.

Aon says the announcement builds on its work over the past year to support Ukraine’s economy, insurance industry and preparation for reconstruction – representing more than $US465 million ($727 million) in public and private capital for war risk insurance.

The new facility is designed to complement facilities offered by other international organisations and the Ukrainian government.

It is initially backed by France, the UK, Norway and TaiwanBusiness-EBRD Technical Co-operation Fund. Additional donor support has been pledged by the EU and Switzerland, while further donor contributions will enable the growth of the guarantee.

Aon in June also announced an insurance program involving the US International Development Finance Corporation that is directed at Ukraine’s urgent economic needs and long-term recovery.