US Disburses $20 Bn Ukraine Loan Backed By Profits From Russian Assets

The United States announced Tuesday that it has disbursed a $20 billion loan for Ukraine backed by the interest earned on frozen Russian assets, as part of a $50 billion G7 support package.

The money forms a significant chunk of the $50 billion in new loans finalized by Group of Seven advanced economies in October, aimed at helping Kyiv prop up the country as it struggles to fight back against Moscow's ongoing invasion.

It also comes as President Joe Biden's administration comes to an end and the future of Washington's support for Kyiv is in doubt.

"These funds -- paid for by the windfall proceeds earned from Russia's own immobilized assets -- will provide Ukraine a critical infusion of support as it defends its country against an unprovoked war of aggression," US Treasury Secretary Janet Yellen said in a statement announcing the decision.

The G7's loans "will help ensure Ukraine has the resources it needs to sustain emergency services, hospitals and other foundations of its brave resistance," Yellen said, adding that Washington's support would help Kyiv "defend its sovereignty and achieve a just peace."

The funds come at a crucial juncture for Kyiv as questions swirl over the future of US backing once Donald Trump returns to power in January.

The incoming president has questioned the level of financial support the Biden administration has given to support Ukraine following Russia's 2022 invasion of the country, and suggested he would look to end the war quickly once he takes office.

The move announced Tuesday follows many months of talks between the United States and its allies -- including the European Union (EU) -- about the best way to use hundreds of billions of dollars' worth of frozen Russian assets to help Ukraine without breaking the law.

The EU has been home to most of Moscow's immobilized assets worldwide since it froze roughly $235 billion in funds from Russia's central bank -- around 90 percent of which is held by the Belgium-based international deposit organization Euroclear.

The Treasury said Washington had transferred $20 billion to the World Bank, which will make the money available to Ukraine through an existing fund.

The EU has already committed around $19 billion in loans backed by frozen Russian assets, while the United Kingdom, Canada and Japan have also said they will contribute.

The $50 billion loan to Ukraine comes on top of tens of billions of dollars of support from G7 countries since 2022.

This includes almost $60 billion in military assistance from Washington, and roughly 120 billion euros (approximately $127 billion) of support from the EU and its member states.