G-7 leaders agree on how to distribute nearly $50 billion in loans to Ukraine

ROME – Leaders of the wealthy nations of the Group of Seven (G-7) are seeking advice on how to distribute nearly US$50 billion ($66 billion) in loans to Ukraine backed by gains from frozen Russian state assets, according to an October statement. He reached his union. 25.

“These loans will be repaid and repaid by future extraordinary revenue streams resulting from the immobilization of Russian State Assets,” the G-7 statement said.

“Our goal is to start distributing funds by the end of the year,” the statement, issued as global finance chiefs gathered in Washington for the annual meetings of the International Monetary Fund and the World Bank, said. The statement was included.

In an additional statement made by G-7 finance ministers, it was stated that the loans will be distributed through a series of bilateral loans “in installments to reflect Ukraine’s urgent financing needs” starting on December 1 and until the end of 2027.

Each bilateral loan will take effect no later than June 30, 2025, providing some timing flexibility for G-7 members to adjust the details.

In the statement where the principles and some technical details were explained, it was stated that while specific amounts for bilateral loans were not specified, additional details would be published in a term sheet to be distributed in the coming days.

The United States announced on October 23 that it would provide a US$20 billion loan to Ukraine through December; This was meant to protect against potential repossession of loan funds if Republican presidential candidate Donald Trump wins the US election in November.

Trump has vowed to “withdraw” from Ukraine’s war with Russia. The next US president won’t take office until January.

Another US$20 billion loan is expected to come from the EU, which includes G-7 members Germany, France and Italy, while the remaining US$10 billion is expected to be shared between Canada, the UK and Japan.

In the statement of the finance ministers, it was said: “We will stand by Ukraine no matter how long it takes.”

The statement stated that the loans will be distributed through many channels, including the Macro-Financial Assistance Loan from the EU, the IMF’s Multi-Donor Managed Account for Ukraine and the newly created Financial Intermediation Fund for Ukraine at the World Bank.

G-7 leaders agreed at their annual summit in southern Italy in June to provide loans that would be backed by interest accrued from blocked Russian funds, but left many technical details to be worked out.

About €260 billion (S$371 billion) in Russian assets, such as central bank reserves, have been frozen under the following sanctions. Moscow’s invasion of Ukraine in February 2022.

The vast majority of these assets are held at Euroclear, a central securities depository based in Belgium, making the European Union a key player in any plan to exploit the assets.

“The G-7 remains steadfast in its solidarity to support Ukraine’s struggle for freedom, recovery and reconstruction,” the G-7 statement said. While the statement was included, it was added that “time (Russia) is not on President Putin’s side.” REUTERS