US Plans to Unlock $50 Billion Loan for Ukraine Using Frozen Russian Assets by Year-End

The United States is working to unlock a $50 billion loan for Ukraine using revenues from frozen Russian assets, US Ambassador to Ukraine Bridget Brink revealed in an interview with Forbes Ukraine. She expressed optimism that this goal could be achieved by the end of 2024 in collaboration with European and other international partners.

Brink noted that success in securing these funds would provide Ukraine with a significant financial boost. However, she highlighted that further steps would be needed, particularly in light of upcoming US elections. She added, “I do not see any decline in the strong bipartisan support for Ukraine,” referring to backing in both houses of Congress and the general public.

Frozen Russian assets in the European Union, primarily from the Russian central bank, total approximately €210 billion. These assets generate estimated revenues of €2.5 to 3 billion annually, depending on interest rates. Discussions are ongoing to use these funds as collateral for Ukraine’s loan.

The concept of utilizing frozen Russian assets for Ukraine’s benefit has been a key topic among G7 leaders. In June 2024, at the G7 summit in Italy, world leaders agreed on a plan to allocate $50 billion to Ukraine, with the funds being serviced by revenues from these assets. Under this arrangement, the US and the EU would each contribute about $20 billion, while the remaining $10 billion would be shared among the UK., Japan, and Canada.

However, to ensure a steady flow of income to service the loan, the US has called for guarantees that Russian assets, largely located in Europe, remain frozen. The European Commission has proposed extending the current asset freeze from six months to 36 months, with discussions also considering an extension of up to five years. However, Hungary’s Prime Minister Viktor Orbán has vetoed these proposals, complicating progress.

In response to these challenges, the European Union is preparing alternative financing measures. On September 17, Financial Times reported that the EU was considering providing up to €40 billion in new loans to Ukraine, even without US participation, to maintain financial stability. These funds are seen as essential, with Ukraine facing an estimated $38 billion financing gap in 2025, according to the Ukrainian government and the IMF.