US disburses $27b Ukraine loan backed by profits from Russian assets
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A paramedic and a rescuer helping a woman at the site of a Russian missile strike in the Ukrainian city of Zaporizhzhia, on Dec 10.
PHOTO: REUTERS
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WASHINGTON - The US announced on Dec 10 that it has disbursed a US$20 billion (S$26.8 billion) loan for Ukraine backed by the interest earned on frozen Russian assets, as part of a US$50 billion G-7 support package.
The money forms a significant chunk of the US$50 billion in new loans finalised by Group of Seven (G-7) advanced economies in October, aimed at helping Kyiv as it struggles to fight back against Moscow’s ongoing invasion.
The funds come at a crucial juncture for Kyiv as questions swirl over the future of its US backing once President Joe Biden hands power to Donald Trump in January.
The incoming president has questioned the level of financial support given to Ukraine following Russia’s 2022 invasion, saying over the weekend he will “probably” reduce aid to Kyiv.
“These funds – paid for by the windfall proceeds earned from Russia’s own immobilised assets – will provide Ukraine a critical infusion of support as it defends its country against an unprovoked war of aggression,” US Treasury Secretary Janet Yellen said in a statement.
The G-7‘s loans “will help ensure Ukraine has the resources it needs to sustain emergency services, hospitals and other foundations of its brave resistance,” Dr Yellen went on to say.
Ukrainian President Volodymyr Zelensky said on Dec 10 that he was “deeply grateful” for the disbursement, calling it “a powerful act of justice”.
The support “will strengthen Ukraine’s defence and help protect our sovereignty and people against unprovoked aggression”, he added in a separate statement.
The move follows long talks between the US and its allies about the best way to tap frozen Russian assets to help Ukraine without breaking the law.
“After Russia’s brutal invasion of Ukraine, the G-7 made a commitment that Russian sovereign assets in our jurisdictions will remain immobilised until Russia ends its aggression and pays for the damage it has caused Ukraine,” White House Press Secretary Karine Jean-Pierre told reporters on Dec 10.
“The United States and G-7 are now making good on that commitment,” she added.
The EU has been home to most of Moscow’s immobilised assets worldwide since it froze roughly US$235 billion in funds from Russia’s central bank. Around 90 per cent of this is held by the Belgium-based international deposit organisation Euroclear.
The Treasury said Washington had transferred US$20 billion to the World Bank, which will make the money available to Ukraine through an existing fund.
The EU has already committed around US$19 billion in loans backed by frozen Russian assets, while Britain, Canada and Japan have also said they will contribute.
The US$50 billion loan to Ukraine comes on top of other support from G-7 countries since 2022. This includes almost US$60 billion in military assistance from Washington, and roughly €120 billion (S$169.5 billion) of support from the EU and its member states. AFP
