G7 Leaders Agree to Lend Ukraine $50 Billion Using Frozen Russian Assets

On Thursday, G7 leaders reached an agreement to lend Ukraine $50 billion this year, backed by profits from frozen Russian assets, to support the country’s war efforts and rebuilding initiatives.

This plan, which has been in development for years, is a win for US President Joe Biden, who has been advocating for the deal amid some European countries’ hesitation. The agreement will be formalized in the summit’s concluding communique.

However, key details of the plan still need to be ironed out. While the US is prepared to offer a loan of up to $50 billion, the exact amount the US will lend remains uncertain. Other countries will contribute to share the risk.

Officials anticipate that while it will take time for the funds to be disbursed, the process will begin within this calendar year. The funds will be allocated for military, budget, humanitarian, and reconstruction support.

The loan can be considered “secured” due to the interest generated from the Russian assets. Although there are scenarios where the income stream “may not flow,” reparations could provide a solution.

If a peace settlement occurs, the assets could either remain immobilized, continuing to generate interest to repay the loans, or Russia could be held accountable for the damage caused.