Leaders from the Group of Seven (G7) wealthy democracies have come to a consensus on providing Ukraine with a substantial loan amounting to $50 billion (€46.3 billion). This loan is set to utilize interest earned on profits from Russia’s frozen central bank assets as collateral, marking a significant step in international support for Ukraine’s stability.

The decision follows a recent initiative by the European Union to channel windfall profits garnered from immobilized Russian assets towards Kyiv’s benefit, demonstrating a unified effort among Western nations to bolster Ukraine’s resilience.

While specific details are still being finalized as G7 leaders convene for a summit in Italy, there is anticipation that the allocated funds could be made available to Kyiv by the end of the year. The bulk of the financing would be provided by the US government, leveraging windfall profits derived from approximately $300 billion in immobilized Russian assets, primarily held in Europe.

Although the loan would primarily be guaranteed by the US, there is potential for supplementary contributions from European sources or other participating nations, as indicated by a French official.

The legal implications surrounding the confiscation of these assets and their allocation to Ukraine have been subject to deliberation for over a year. Western nations initially froze Russian central bank assets accessible to them following Moscow’s invasion of Ukraine in 2022.

Directly utilizing these funds to support Ukraine’s defense efforts would necessitate a more robust legal framework. Therefore, the current approach represents a pragmatic workaround to provide vital financial assistance to Ukraine amid ongoing geopolitical tensions.