G7 agreed on a $50 billion loan to Ukraine guaranteed by Russian assets

The G7 countries have agreed on a preliminary plan for the structure of loans based on the size of their economies to provide Ukraine with $50 billion in aid that will start flowing by the end of 2024.

As planned, the loans will be covered by frozen Russian assets located in Europe, Bloomberg reports. After months of discussions over how to use profits from frozen Russian assets, the plan is expected to gain support from leaders at a meeting in Italy this week.

G7 countries will provide loans to Ukraine that will be repaid using profits from some $280 billion in frozen Russian assets, most of which are frozen in Europe. This agreement is expected to provide critical support to Ukraine in the medium term and help meet its financial needs until 2025 and beyond.

Under the mechanism to be signed in Italy, the United States, European Union and other participants would provide loans to Ukraine, and proceeds from Russian assets would be used to repay those funds over time, the sources, who spoke on condition of anonymity, told Bloomberg.

Canada is ready to allocate $3.6 billion to implement this initiative, a Canadian government spokesman said. The loans will be structured differently based on each participant's internal procedures, and each will bear the risk of the loans provided in the event that the frozen Russian assets generate less profit than expected.

Final technical details will be agreed upon after the summit, the sources said. The aid can be used to support Ukraine's defence, economy and reconstruction. Details of the deal could change at the G7 meeting.

If the deal is completed, it will be a signal to Russia that the G7 is ready to support Ukraine in the long term. as the war shows no signs of abating 2.5 years after its start. Income from frozen Russian assets is estimated at 3-5 billion euros per year. EU has already agreed to provide Ukraine with these funds twice a year.

Repayment of the loan depends on how long the assets remain frozen so that their excess profits can be used to repay the loan, a process that will take several years. G7 leaders have repeatedly said that assets will remain frozen until Russia agrees to pay for Ukraine's reconstruction.

“I think that we will decide on the main directions, but some details will have to be worked out by experts within a set time frame, US National Security Adviser Jake Sullivan said today in Italy. – This is how I predict this will all end.”

“Ukrainians are sitting on $10-12 trillion in critical minerals. They could be the richest country in all of Europe“said Republican Senator Lindsey Graham.

“I don’t want to give this money and these assets to Putin so that he can share them with China. If we help Ukraine now, they can become a better business partner.”

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