G7 greenlights $50 billion loan for Ukraine Secured by frozen Russian assets

The Group of Seven (G7) nations have finalized a substantial $50 billion loan to Ukraine, utilizing profits generated from immobilized Russian central bank assets.

This agreement paves the way for critical aid to reach Kyiv while largely insulating it from potential disruptions related to the upcoming US presidential election, Caliber.Az reports via foreign media.

In a joint statement, G7 leaders announced, “Today, we have reached a consensus on delivering approximately $50 billion in Extraordinary Revenue Acceleration (ERA) loans to Ukraine.” The funds will be channelled through various means to support Ukraine’s budget, military efforts, and reconstruction initiatives.

The agreement follows extensive negotiations among the US and its allies to determine the loan's structure and ensure that repayment is secured, protecting taxpayers from potential losses. The US will contribute $20 billion, with Europe expected to match that amount, and the UK pledging around $3 billion. Canada and Japan are also anticipated to provide additional support.

Under the agreed framework, the G7 nations will each extend loans to Ukraine, which will be repaid using profits from the approximately $280 billion of blocked Russian assets, primarily held in Europe. This financial assistance aims to bolster Ukraine as it rebuilds and defends itself, addressing its financing needs through 2025 and beyond.

The G7 intends for this loan to demonstrate unwavering support for Kyiv and convey to Russian President Vladimir Putin that he cannot outlast the coalition in this ongoing conflict. “We will not tire in our resolve to give Ukraine the support it needs to prevail,” the leaders emphasized in their statement.

The US expects to allocate at least half of its $20 billion share to a World Bank fund managing the loans as early as December, potentially disbursing the full amount before the next administration takes office in 2025.

This agreement marks the culmination of a year of vigorous diplomatic efforts by the US to persuade its allies, particularly in Europe, to capitalize on the economic potential of these frozen assets. While initial calls for the outright seizure of the funds faced significant pushback, discussions on leveraging the assets for Ukraine's benefit gained momentum, especially as political considerations regarding taxpayer-funded aid grew more complex on both sides of the Atlantic.

By Tamilla Hasanova