G7 Agrees to Provide $50 Billion in Loans to Ukraine

By Angelo Amante and David Lawder

ROME/WASHINGTON (Reuters) – Leaders of the Group of Seven wealthy democracies reached a consensus on delivering approximately $50 billion in loans to Ukraine, supported by the earnings from frozen Russian sovereign assets starting as early as December.

Loan Details

The G7 statement indicated that these loans would be serviced and repaid through future extraordinary revenues arising from the immobilization of Russian Sovereign Assets.

> "Our aim is to begin disbursing the funds by the end of the year," the statement clarified, released during the global finance chiefs meeting in Washington for the International Monetary Fund and World Bank annual meetings.

An accompanying statement from G7 finance ministers stated the loans would be given via a series of bilateral loans starting December 1, lasting through the end of 2027, with installments reflecting Ukraine’s urgent financing needs.

Each bilateral loan must come into effect by June 30, 2025, providing timing flexibility for G7 members to arrange the necessary details. The announcement did not specify amounts for the bilateral loans but mentioned that additional details would be provided in an upcoming term sheet.

Election Timing

On Wednesday, the U.S. announced a $20 billion loan for Ukraine scheduled for December, intended to protect the funds from being rescinded if Republican presidential candidate Donald Trump wins the November election. Trump has expressed intentions to withdraw from supporting Ukraine's conflict with Russia. The next president will assume office in January.

An additional $20 billion loan is anticipated from the EU, comprising G7 members Germany, France, and Italy, with the remaining $10 billion divided among Canada, Britain, and Japan.

> "We will stand by Ukraine for as long as it takes," emphasized the finance ministers' statement.

These loans will be disbursed through various channels, including a Macro-Financial Assistance Loan from the EU, the IMF's Multi-Donor Administered Account for Ukraine, and a newly established Financial Intermediary Fund for Ukraine at the World Bank.

G7 Commitment

Friday's announcement regarding the "extraordinary revenue acceleration loans" fulfills a commitment from June by G7 leaders during their annual summit in southern Italy to utilize the earnings from frozen Russian assets to support Ukraine, finalizing many technical details.

Approximately 260 billion euros ($280.62 billion) in Russian assets, such as central bank reserves, have been frozen under sanctions following Moscow's February 2022 invasion of Ukraine. The majority of these assets are located in Euroclear, a central securities depository in Belgium, making the EU a critical participant in utilizing these assets.

> "The G7 remains steadfast in its solidarity to support Ukraine's fight for freedom, and its recovery and reconstruction," the G7 leaders' statement concluded, adding that "time is not on (Russian) President Putin's side."

($1 = 0.9265 euros)