Ukraine Receives First $1 Billion from $20 Billion US Loan Backed by Frozen Russian Assets

Ukraine has received the first $1 billion installment of a $20 billion loan from the United States, backed by proceeds from frozen Russian assets on December 24.

This payment marks the beginning of a broader initiative under the G7's Economic Recovery and Assistance (ERA) Mechanism, which aims to provide $50 billion to Ukraine for its recovery and reconstruction.

Ukrainian Prime Minister Denys Shmyhal confirmed the disbursement via a Telegram post, expressing gratitude to the US and the World Bank for their ongoing support. “This is the first tranche of the planned $20 billion, which will be provided by the United States through the use of frozen Russian assets,” Shmyhal stated. He emphasized that these funds will contribute to Ukraine’s path to recovery.

The United States' commitment to the $20 billion loan, announced earlier this month, has been deposited into a special World Bank account. This financial assistance will support Ukraine’s economic stabilization and its defense needs. Approximately half of the total $50 billion, allocated by the G7, is expected to be used for Ukraine’s defense in 2025.

The US initiative is part of a broader effort to use confiscated Russian assets to fund Ukraine’s reconstruction. Shmyhal reiterated Ukraine’s expectation that all sovereign Russian assets will be seized and directed toward rebuilding efforts.

In addition to this loan, the US has already provided nearly $30 billion in grants to Ukraine between 2022 and 2024, crucial for maintaining the country’s financial stability during the ongoing Russia’s war against Ukraine.

The funds will be directed to Ukraine’s general budget, with oversight from the Ministry of Finance, USAID, and the DBS Audit Activity, ensuring transparency in their use.

Earlier, Ukraine received a $1.35 billion grant from the United States to support essential humanitarian and social programs. The funds, allocated through USAID, will be directed toward priority social needs, including paying teachers' salaries.