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The United Kingdom has announced it will provide a $3 billion loan to Ukraine to strengthen the country’s military capabilities amid its ongoing war with Russia.
Some shit you should know before you read: Shortly after Russia invaded Ukraine, various Western countries began seizing and freezing Russian sovereign assets, which now total approximately $300 billion worldwide. The European Union controls the largest portion, holding around $230 billion, primarily in Belgium, where Euroclear, a major financial institution, manages most of these frozen funds. The United States has frozen roughly $5 billion in Russian assets, while the United Kingdom holds $33 billion in Russian assets. For years, G7 and European leaders have been exploring legal mechanisms to use the interest earned on these assets for military aid and reconstruction efforts.
What’s going on now: During a meeting with President Volodymyr Zelenskyy, UK Prime Minister Keir Starmer announced a $3 billion loan to Ukraine, funded by profits from frozen Russian sovereign assets. The loan, part of the G7 Extraordinary Revenue Acceleration (ERA) plan, is designed to provide Ukraine with more military equipment. The funds will be delivered in three equal annual payments of approximately $1 billion, with the first tranche expected to reach Kyiv within the next week. Ukraine will use the money exclusively for military procurement, including weapons production and defense infrastructure.
According to Ukrainian President Zelenskyy, the loan will be repaid using the profits generated from sanctioned Russian assets, ensuring that “the one who started the war must be the one to pay.”
In a statement, Prime Minister Starmer said, “We are unwavering in our support for Ukraine, and this loan demonstrates our commitment to ensuring they have what they need to defend their country.” The financial package is in addition to the $3 billion per year in direct military aid the UK has already pledged to Ukraine.
