G7 nations are committed to making $50 billion in lending available to Ukraine by year-end, US Treasury Secretary Janet Yellen said Wednesday at a meeting with her Ukrainian counterpart.
The Group of Seven wealthy democracies agreed to offer a new $50 billion loan for Ukraine, using profits from the interest on Russian assets frozen after President Vladimir Putin ordered the invasion of his neighbor in 2022.
“This loan initiative will provide Ukraine with urgently needed funds and will make funds available by the end of this year,” Yellen said, ahead of her meeting with Ukraine Finance Minister Sergii Marchenko.
“It will send a message to Putin that waiting out our coalition is a losing strategy,” she added.
In a separate statement, US President Joe Biden said that his government “will provide $20 billion in loans to Ukraine that will be paid back by the interest earned from immobilized Russian sovereign assets.”
“Our efforts make it clear: tyrants will be responsible for the damages they cause,” he added.
The remaining $30 billion in loans are set to come from a combination of G7 partners including the European Union, United Kingdom, Canada and Japan, US officials said.
Economic, military aid
The US contribution of $20 billion is to be split between economic and military support, the White House said earlier Wednesday.
“The United States will provide at least $10 billion of our loans via economic support,” said Daleep Singh, White House deputy national security advisor for international economics.
This could involve projects on energy assistance or infrastructure, he told reporters.
The other $10 billion is expected to take the form of US military support, although Singh noted that this will require Congressional authority to raise the amount of foreign military financing it can provide to Ukraine.
“To be clear, either way, the US will provide $20 billion in support to Ukraine through this effort, whether it’s split between economic and military support or provided entirely via economic assistance,” he said.
Yellen and Marchenko also signed a joint statement Wednesday marking their intent to enter into the loan.
The aim is also to “demonstrate our commitment that profits earned on Russia’s immobilized assets, not new US or Ukrainian tax dollars, will be the source of repayment,” Yellen added in a speech.
Treasury officials spoke daily with Ukrainian and European counterparts to finalize the conditions in recent weeks, a source familiar with discussions told AFP.
On Tuesday, Yellen said the United States and G7 partners were very close to finalizing the package.
The expectation is for the funds to start heading to Ukraine by the end of this year.
G7 finance ministers and central bank governors are expected to meet later this week in Washington, with world financial leaders gathered in the US capital for meetings hosted by the International Monetary Fund and World Bank.
