Ukraine receives €3 billion EU loan tranche backed by frozen Russian assets

Ukraine has received the first €3 billion ($3.09 billion) tranche from the European Union as part of a larger loan package agreed upon by the Group of Seven (G7) nations, backed by income from frozen Russian sovereign assets, Kyiv and Brussels announced on January 10.

“Today, we deliver €3 billion to Ukraine, the first payment of the EU part of the G7 loan, giving Ukraine the financial power to continue fighting for its freedom — and prevail,” European Commission President Ursula von der Leyen said on the social media platform X, Caliber.Az reports.

Almost 3 years into Russia’s war of aggression, Ukraine can keep counting on its friends and partners.

Today, we deliver €3 billion to Ukraine, the 1st payment of the EU part of the G7 loan.

Giving Ukraine the financial power to continue fighting for its freedom – and prevail. pic.twitter.com/W9l7K1kfiV

— Ursula von der Leyen (@vonderleyen) January 10, 2025

Ukrainian Prime Minister Denys Shmyhal confirmed the transfer via Telegram, stating, “This is the first tranche of funds from the European Union, secured through income from frozen Russian assets.” Shmyhal emphasized that the funds would be directed toward priority budget expenditures.

The tranche is part of the G7's Extraordinary Revenue Acceleration for Ukraine (ERA) program, which pledges $50 billion in financial support through multiple channels. These include the EU's Macro-Financial Assistance Loan, the IMF's Multi-Donor Administered Account for Ukraine, and a newly established Financial Intermediary Fund at the World Bank.

In December 2024, the US Treasury Department transferred its $20 billion share of the G7 loan to the World Bank fund. The EU has committed $20 billion, with additional contributions of $3 billion from the UK, $3.7 billion from Canada, and $3 billion from Japan.

Shmyhal highlighted that the funding aligns with the principle that "Russia will pay," adding, "This strengthens Ukraine's financial resilience for 2025."

A unique aspect of the ERA program allows portions of funds from the EU and the UK to be allocated directly for defence needs. The initiative ensures Ukraine has the financial capacity to sustain its defence efforts and bolster its economy amid ongoing challenges.

By Tamilla Hasanova