Russian invasion has blocked Ukrainian ports in the Black Sea. Photo by Ronan Furuta on Unsplash.

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Ukrainian authorities are preparing to set up a $500m insurance fund to cover potential damages to civilian vessels entering the country’s ports.

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The announcement, which was made by Ukraine’s Deputy Prime Minister Oleksandr Kubrakov on Twitter, comes as the war-hit country tries to boost exports crucial to support its economy. 

Ukraine is said to be a key producer and exporter of agricultural goods, metals, and chemical products, but since Russia’s invasion a year ago, Black Sea ports have been blocked, making it impossible to export anything but food outside.

In his tweet, Kubrakov said that a law to create the insurance fund has been approved by the country’s parliament, Verkhovna Rada.

“Ukraine will compensate possible damages to civilian vessels entering its ports. @verkhovna_rada decided the insurance fund amounts $500m. We are working on resuming delivery & expanding the range of products. I invite countries of the civilized & interested businesses to cooperate,” Kubrakov’s tweet read. 

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As per Reuters’ report, last week, Ukraine said that it would approach Turkey and the United Nations (UN) to begin negotiations to extend the Black Sea grain agreement.

Last July, the UN and Turkey meditated for The Black Sea Grain Initiative, which allowed grains to be exported from three Ukrainian ports — Odesa, Chornomorsk, Yuzhny/Pivdennyi.

Ukraine is seeking a minimum one-year extension that would cover the ports of Mykolaiv too. 

If no extension is reached, the deal, which was extended in November 2022, will end on 18 March this year. Last month, reinsurance firms excluded Russia, Ukraine, and Belarus from the policies they offer to insurance companies.