The Group of Seven (G7) wealthy democracies will provide about $50 billion in loans to Ukraine. The loans will be funded by revenue from frozen Russian sovereign assets. Disbursement of funds is expected to start in December.
According to an official G7 statement, “these loans will be serviced and repaid by future extraordinary revenues stemming from the immobilization of Russian Sovereign Assets.” The G7 aims to begin releasing funds by the end of the year. This timeline aligns with the International Monetary Fund and World Bank’s annual meetings in Washington.
Loan Structure and Disbursement Plan
G7 finance ministers explained that loans will be delivered through bilateral agreements. The first disbursement is scheduled for December 1, with releases continuing through 2027. The amount of each loan will be adjusted to meet Ukraine’s financial needs. All loans are expected to be operational by June 30, 2025, allowing for flexibility in the arrangement of loan details.
While the announcement outlined the loan structure, specific loan amounts remain undisclosed. Additional details will be provided in a forthcoming term sheet.
On Wednesday, the U.S. announced plans to issue a $20 billion loan to Ukraine in December. This timing strategy aims to protect the funds from potential withdrawal if Republican presidential candidate Donald Trump wins the upcoming election. Trump has signaled his intention to end U.S. support for Ukraine’s conflict with Russia. The new U.S. president will take office in January.
The European Union, which includes G7 members Germany, France, and Italy, is expected to contribute another $20 billion. The remaining $10 billion will come from Canada, Britain, and Japan.
“We will stand by Ukraine for as long as it takes,” the G7 finance ministers affirmed in their statement.
The loans will be channeled through several platforms. These include the EU’s Macro-Financial Assistance Loan, the International Monetary Fund’s Multi-Donor Administered Account for Ukraine, and the new Financial Intermediary Fund for Ukraine at the World Bank.
G7’s Commitment to Ukraine
The “extraordinary revenue acceleration loans” are part of a G7 commitment made at the G7 summit in southern Italy last June. During the summit, G7 leaders agreed to use frozen Russian assets to support Ukraine’s recovery and reconstruction.
Since Russia’s invasion of Ukraine in February 2022, approximately €260 billion ($280.62 billion) in Russian assets have been frozen. This includes central bank reserves held in financial institutions. Most of these assets are stored in Euroclear, a Belgium-based central securities depository. As a result, the European Union’s role in this initiative is critical.
“The G7 remains unwavering in its support for Ukraine’s fight for freedom and its recovery and reconstruction,” G7 leaders declared in their statement. They emphasized that “time is not on (Russian) President Putin’s side,” reaffirming their ongoing commitment to Ukraine’s defense and recovery efforts.