UK commits $3 billion to Ukraine defence industry under G7 ERA initiative

Ukraine and the United Kingdom have formalized a landmark agreement securing $3 billion in funding through the G7’s Extraordinary Revenue Acceleration (ERA) program, aimed at bolstering Ukraine’s defence industry between 2025 and 2026.

The accord was announced jointly by Ukraine’s Ministry of Defence and Ministry of Strategic Industries, Caliber.Az reports, citing Ukrainian media.

The funds, sourced from excess profits derived from frozen Russian assets, will be strategically allocated to acquire foreign-made defence products, maintain and repair military equipment, support joint ventures between Ukrainian and international defence firms, and procure other essential materials—including domestically produced items.

Already, the UK has disbursed approximately $2 billion in two separate payments to Ukraine under the ERA program. This latest tranche underscores a deepening commitment to strengthening Ukraine’s military capabilities amid ongoing conflict.

Davyd Aloyan, Ukraine’s Deputy Minister for Strategic Industries, emphasized the critical need for financial support to fully leverage the country’s defence potential. “Ukrainian companies have $35 billion worth of capacity, but they lack the funds to use it fully,” Aloyan stated. He further highlighted that “using excess profits from frozen Russian assets will greatly boost Ukraine’s defence production and repair capabilities.”

The agreement was signed on behalf of Ukraine by First Deputy Minister of Defence Serhiy Boyev and Deputy Minister for Strategic Industries Davyd Aloyan. Representing the United Kingdom, Major General Anne-Lee Riley, Director of the Strategic Capabilities Acquisition and Employment Directorate at the UK Ministry of Defence, endorsed the pact.

The ERA program represents a concerted effort by the G7 nations to leverage frozen Russian assets in repaying loans extended to Ukraine, with a total fund of $50 billion. A significant portion of these resources is designated for defence procurement and capacity-building to support Ukraine’s ongoing resistance efforts.

By Vafa Guliyeva