WASHINGTON: G7 leaders have finalised details surrounding a $50 billion loan to aid Kyiv, backed by profits from Russian sovereign assets frozen after its invasion of Ukraine.

Leaders of the Group of Seven wealthy democracies said they “have reached a consensus on how to deliver” the loans of around $50 billion, with an aim to start disbursing funds by the end of this year.

“The loan proceeds will be disbursed through multiple channels to support Ukraine’s budgetary, military and reconstruction assistance,” G7 leaders added.

Their announcement came on Friday as world financial leaders gathered in Washington this week for meetings, hosted by the International Monetary Fund and World Bank.

Finance ministers have “agreed on a technical solution ensuring consistency, coordination, fair distribution of lending, and solidarity among all G7 partners,” the statement said.

“We will not tire in our resolve to give Ukraine the support it needs to prevail,” the leaders added.

They called on Moscow to end its war and pay for damage caused to Ukraine.

$20bn US support

This week, US President Joe Biden said that as part of the G7 package, the United States would provide $20 billion in loans to Ukraine, to be paid back by the interest earned from immobilised Russian sovereign assets.

This is aimed at supporting Ukraine now, “without burdening taxpayers”. “Our efforts make it clear: tyrants will be responsible for the damages they cause,” Biden said.

US Treasury Secretary Janet Yellen signed a statement on Wednesday with her Ukrainian counterpart Sergii Marchenko marking their intent to enter into the loan.

The move also committed that new United States or Ukrainian tax dollars would not be the source of repayment.

The remaining $30bn in loans is set to come from a combination of G7 partners, including the Euro­pean Union, United Kingdom, Canada and Japan, US officials said.

The EU, which has frozen roughly $235bn Russian central bank funds — the vast bulk of immobilised Russian assets worldwide — said it would contribute EUR18 billion ($19.4 billion).

“Russia must end its illegal war of aggression and pay for the damage it has caused,” the 27-nation bloc’s chief, Ursula von der Leyen, said in a statement.

“We’re steadfast in our solidarity with Ukraine’s fight for freedom.” Implementation of the G7 loan suffered from delays as the United States had sought guarantees from the EU that the Russian assets would remain frozen.

“We have once again made clear our unwavering commitment to stand by Ukraine for as long as it takes,” said the G7 statement. “Time is not on President (Vladimir) Putin’s side.”

Published in Dawn, October 27th, 2024