G7 to make $50 bn Ukraine loan available by year-end: Yellen

US Treasury Secretary Janet Yellen said the loan would ‘provide Ukraine with urgently needed funds,’ as she met Ukrainian Finance Minister Sergii Marchenko – Copyright AFP SAUL LOEB

Beiyi SEOW

G7 nations are committed to making $50 billion in lending available to Ukraine by year-end, US Treasury Secretary Janet Yellen said Wednesday as she met her Ukrainian counterpart in Washington.

The Group of Seven wealthy democracies had agreed to offer a new $50 billion loan for Ukraine, using profits from the interest on Russian assets frozen after President Vladimir Putin ordered the invasion of his neighbor in 2022.

“This loan initiative will provide Ukraine with urgently needed funds and will make funds available by the end of this year,” Yellen said, ahead of talks with Ukraine Finance Minister Sergii Marchenko.

“It will send a message to Putin that waiting out our coalition is a losing strategy,” she added.

President Joe Biden said that the United States “will provide $20 billion in loans to Ukraine that will be paid back by the interest earned from immobilized Russian sovereign assets.”

This means Ukraine can receive needed assistance now “without burdening taxpayers,” he added in a statement.

“Our efforts make it clear: tyrants will be responsible for the damages they cause,” Biden added.

The remaining $30 billion in loans is set to come from a combination of G7 partners including the European Union, United Kingdom, Canada and Japan, US officials said.

It should be clear to aggressors that there is a price to pay for invading a democratic country, Marchenko said Wednesday.

“I hope that we will be able to use this money starting from the beginning of 2025,” he added, calling the funds a tremendous help.

– Economic, military aid –

“The United States will provide at least $10 billion of our loans via economic support,” said Daleep Singh, White House deputy national security advisor for international economics.

This could involve projects on energy assistance or infrastructure, he told reporters.

The support will go through a financial intermediary fund established by the World Bank.

The other $10 billion is expected to take the form of US military support, although Singh noted that this will require Congressional authority to raise the amount of foreign military financing it can provide.

“Either way, the US will provide $20 billion in support to Ukraine through this effort, whether it’s split between economic and military support or provided entirely via economic assistance,” he said.

Yellen and Marchenko signed a statement Wednesday marking their intent to enter into the loan.

The aim is also to “demonstrate our commitment that profits earned on Russia’s immobilized assets, not new US or Ukrainian tax dollars, will be the source of repayment,” Yellen said.

Treasury officials spoke daily with Ukrainian and European counterparts to finalize the conditions in recent weeks, a source familiar with discussions told AFP.

G7 finance ministers and central bank governors are expected to meet later this week in Washington, with world financial leaders gathered in the US capital for meetings hosted by the International Monetary Fund and World Bank.