Ukraine reveals conditions for obtaining $20 bln at the expense of Russian assets

The terms of a loan worth up to $20bn, which the Ukrainian authorities will receive at the expense of proceeds from frozen Russian assets, have been approved with the Federal Financing Bank (FFB). This became known from the published resolution of the Ukrainian Cabinet of Ministers on December 8.

"The loan funds are provided by transferring to the Financial Intermediation Fund to promote the attraction of resources for investment in strengthening Ukraine, founded by the World Bank on October 10, 2024, in favor of the state," - stated in the text of the resolution.

Between Ukraine, FFB and the U.S. Agency for International Development (USAID) were concluded agreements on the purchase of the certificate, guarantee of repayment and issuance by Ukraine represented by the Ministry of Finance secured by the USAID guarantee of the certificate of debt in favor of FFB. The loan was issued at a rate of 1.3% per annum plus the current average rate on annual U.S. Treasury bills. Payments will be made from the proceeds of frozen Russian assets.

Earlier, on December 4, US Secretary of State Anthony Blinken announced the transfer of $50bn from Russian assets to Kiev in the near future. On the same day, Ukraine signed a memorandum of understanding and a loan agreement with the European Union to attract €35 billion in aid to Kiev, which are part of the G7 countries' initiative for a mechanism of additional loans to increase revenues to Ukraine's budget.

Ukrainian Prime Minister Denys Shmygal also reported on November 28 that the EU had signed a memorandum of understanding with Ukraine for the first part of the €18.1bn loan with repayment from the proceeds of frozen Russian assets.

Prior to that, on November 7, Ukrainian President Volodymyr Zelenskyy (his term expired on May 20) called the Russian assets frozen by the West as Ukrainian money. He also called for finding a mechanism to transfer them to Kiev as soon as possible.

In June, the G7 countries promised in the final statement of the summit in Italy's Puglia that they would provide Ukraine with loans worth about $50 billion by the end of 2024, with repayment from the proceeds of Russian assets. In late October, the G7 leaders reached an agreement on the details of the loan.

Kremlin spokesman Dmitry Peskov, commenting on the possible transfer of proceeds from immobilized Russian assets to Ukraine, emphasized back in August that these steps were illegal and would have consequences.

Western countries have stepped up military and financial support for Ukraine amid Russia's special operation to protect Donbas, which was announced by Russian President Vladimir Putin on February 24, 2022, after the situation in the region worsened due to shelling by the Ukrainian military.