The US agreed to provide $20 billion for Ukraine as a part of the G7 Extraordinary Revenue Acceleration for Ukraine (ERA), fulfilling its promise to commit to Ukraine’s financing from immobilized sovereign Russian assets of $280 billion.
The G7 agreed to provide Ukraine with a $50 billion loan backed by interest profits generated from Russian assets.
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The loan is destined to finance Ukraine in 2025.
Ukrainian Finance Minister Sergii Marchenko and US Treasury Secretary Janet Yellen signed a joint statement on the loan, a press release from the Ukrainian Ministry of Finance says.
Since the loan will be repaid from future profits received from the immobilized Russian sovereign assets, Ukraine will not use its own resources to repay it, nor cover any related expenses.
“The US government is expected to disburse the loan no later than Dec. 31, 2024,” the press release says.
Apart from the US, the EU has also agreed to contribute its share of “up to €35 billion” ($37.84 billion). Another $3 billion is to be provided by the UK. Japan and Canada are also set to announce contributions.
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“For the first time in history, a multilateral coalition has frozen the assets of an aggressor country and is using the profits from these assets to benefit the country that was attacked,” Marchenko said during a briefing after the signing in Washington.
In September, the European Commission announced a €35 billion ($37.84 billion) EU loan for Ukraine as part of a plan by G7 partners to issue loans of up to $50 billion (about €45 billion) to be provided by the EU and G7 partners.
“If other partners, particularly the US, provide more than $15 billion in aid, the EU’s contribution will decrease. $20 billion is expected from the US, and the UK, Canada, and Japan have also already announced loans, the EU will actually contribute less,” Oleksandra Betliy, an analyst at The Institute for Economic Research and Policy Consulting (IER) wrote on Facebook.
It’s unclear whether the funds can be allocated for use in Ukraine’s military defense against Russia’s invasion of the country.
“Not all of our international partners understand that this $50 billion is not just about budget support for non-defense, but also for security-related purposes,” Betliy wrote.
