UK to funnel $3 billion to Ukraine's arms, hardware repairs under G7 loan covered by Russian assets
Kyiv and London signed an agreement to use $3 billion profits from frozen Russian assets under the Extraordinary Revenue Acceleration (ERA) initiative to cover the needs of the Ukrainian army and the Ukrainian defense industry, Ukraine's Defense Ministry announced on May 27.
The G7's ERA mechanism, totaling $50 billion, provides loans to Ukraine that will be repaid using future profits from frozen Russian assets.
The U.K. has pledged to lend Ukraine 2.26 billion pounds (around $3 billion) in three equal installments as part of the G7's ERA initiative. Ukraine received the first installment worth 752 million pounds ($970 million) on March 7.
The funds will be used to purchase foreign-made defense products, repair and maintain military equipment, implement joint projects with Ukrainian and international defense companies, and purchase other critical materials, including Ukrainian-made products, the statement read.
"Ukrainian enterprises have capacities worth $35 billion, but the lack of funds does not allow them to utilize them to the fullest," Deputy Strategic Industries Minister Davyd Aloian said.
"Therefore, attracting excess profits from frozen Russian assets will significantly boost the production and repair capacities of the Ukrainian defense industry."
Since Russia's full-scale invasion began in 2022, G7 countries have frozen approximately $300 billion in Russian sovereign assets.
The ERA initiative, backed primarily by the U.S. and the EU, aims to use profits from these frozen assets to finance Ukraine's defense and reconstruction.
Read also: Why did Russia invade Ukraine? Debunking Putin's 'root causes' claims
We've been working hard to bring you independent, locally-sourced news from Ukraine. Consider supporting the Kyiv Independent.
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CNBC
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