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 US 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."

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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 -- about the best way to use frozen Russian assets, worth hundreds of billions of dollars, to help Ukraine without breaking the law.

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

Source: AFP