Britain Lends Ukraine £2.26 Billion

By Andrew MacAskill

LONDON (Reuters) – Britain will lend Ukraine £2.26 billion ($2.94 billion) as part of a larger loan plan from the Group of Seven nations, supported by frozen Russian central bank assets. This funding aims to assist Ukraine in purchasing weapons and rebuilding damaged infrastructure.

Defence Minister John Healey stated that the funds will be exclusively for Ukraine's military and might be utilized for the development of drones capable of exceeding the range of some long-range missiles.

Healey mentioned that discussions regarding the allocation of Britain’s portion of the G7 loan had taken place between Ukrainian President Volodymyr Zelenskiy and Prime Minister Keir Starmer in London two weeks prior, and among G7 defence ministers in Italy over the weekend.

When questioned about the possibility of Ukraine using the funds to procure British-made Storm Shadow missiles for targeting deep inside Russia, Healey commented: “They are developing very heavily the use of even longer-range drones. They will work with us on how they use this money and on the weapons they most need.”

The G7 announced in June its commitment to providing a $50 billion loan to support Ukraine, which will be serviced by profits generated from around $300 billion in frozen Russian sovereign assets in the West. These assets were immobilized shortly after Russia’s full-scale invasion of Ukraine in February 2022. Russia has consistently threatened retaliation against the use of frozen assets to finance Ukraine, calling it illegal.

Discussions surrounding the G7 loan are progressing quickly as Western countries aim to secure funding for Ukraine, especially with concerns that if Republican presidential candidate Donald Trump wins the U.S. election next month, support could diminish.

The European Union, which holds the majority of the frozen Russian assets, has already pledged 35 billion euros ($38 billion) as part of its contribution. Britain’s latest loan is in addition to the £12.8 billion ($16.61 billion) it has already pledged in support of Ukraine.

Finance Minister Rachel Reeves indicated that the one-time loan will be disbursed in tranches.

($1 = 0.7678 pounds)

($1 = 0.9223 euros)