6/13/2024–|Last updated: 6/13/202404:03 PM (Mecca time)
The G7 countries agreed to lend Ukraine 50 billion euros ($54 billion), using money generated from frozen Russian assets, according to what the German news agency and Bloomberg reported, citing sources.
War-torn Ukraine is set to use the loan package to bolster its military defense against Russia, finance infrastructure reconstruction and fund the Ukrainian state budget.
New aid is scheduled to start arriving in Ukraine by the end of the year, while the plan is expected to support Kiev in the medium term and help cover its financing needs until 2025 and beyond.
Freeze
The US government said that about $280 billion of Russian Central Bank funds were frozen in Western countries due to sanctions imposed since the beginning of the Russian-Ukrainian war more than two years ago.
It is noteworthy that the bulk of the funds are located within the European Union, and the member states of the bloc recently agreed to use interest income generated from Russian state assets to finance aid to Ukraine.
The G7 leaders will meet at a summit in southern Italy from Thursday to next Saturday.
After months of discussions about how to use profits from frozen Russian sovereign assets, the plan is set to win support from leaders at a summit in Italy this week.
A Canadian government official told Bloomberg that Canada is ready to contribute 5 billion Canadian dollars ($3.6 billion) to finance the initiative.
The loans will be structured differently based on the internal procedures of each participating country, and each will bear the risks of its loans if the frozen assets achieve lower-than-expected profits.
Technical details
The sources said that the final technical details will be settled after the current summit, and the aid can be used to support defense, economy and reconstruction in Ukraine, and it is possible that the details of the agreement will change when the leaders meet today.
The revenues from the frozen assets are estimated at between 3 and 5 billion euros ($3.23 billion to $5.4 billion) annually. The European Union has agreed to provide Ukraine with profits twice a year, but the US-led campaign that has been adopted primarily provides support. While aid protects against political shifts across both sides of the Atlantic in a year of multiple elections.
Repayment of the loan depends on the assets remaining frozen long enough for their windfall to repay it, a process that will take several years.
G7 leaders have repeatedly said assets will remain frozen until Russia agrees to pay for Ukraine’s reconstruction.
US National Security Advisor Jake Sullivan said in Italy: “I think we will decide the basic elements of this matter, but some details are left for experts to work on according to a specific timetable.”
