Group of Seven nations have agreed on a loan structure based on the size of their economies to provide Ukraine with about $50 billion in new aid that will start flowing by the end of the year, Bloomberg reports, citing people familiar with the matter, UNN reports.
Details
After months of debate over how to use the profits generated by frozen Russian sovereign assets, the plan should win the support of leaders at a summit in Italy this week. The Group of Seven countries are supposed to provide Ukraine with loans to be repaid from the profits generated by the frozen Russian assets, most of which are in Europe.
The agreement is expected to provide critical support to Ukraine in the medium term and help cover its financing needs until 2025 and beyond, the publication points out.
"According to the mechanism to be signed in Italy, the United States, the European Union and other participants will provide Ukraine with a loan, and the income received from the assets over time will be used to repay this money," the newspaper writes, citing sources.
Canada is reportedly ready to allocate 5 billion Canadian dollars ($3.6 billion) to fund this initiative, according to a Canadian government official.
"Loans will be structured differently depending on the internal procedures of each participant, and each will bear the risk of providing loans if the frozen assets generate less profit than expected," the publication points out.
According to the sources, the final technical details will be agreed upon after the summit. The aid could be used to support Ukraine's defense, economy, and recovery. The specifics of the deal may change when the leaders meet on Thursday.
"For the Group of Seven countries, this move is a signal to Russia that they are ready to support Ukraine in the long term, as the war shows no signs of abating," the newspaper notes.
Revenues from frozen assets are estimated at 3 to 5 billion euros per year. The EU has already agreed to provide Ukraine with income twice a year, but the U.S.-led initiative provides support and, as the newspaper notes, protects the aid from political shifts on both sides of the Atlantic in a year of multiple elections.
"Repayment of the loan depends on the assets remaining immobilized long enough for windfall profits from them to repay it, a process that will take several years. The G7 leaders have repeatedly stated that the assets will remain blocked until Russia agrees to pay for Ukraine's recovery," the publication says.
"I think we're going to define the main points of this process, but some of the details will have to be worked out by experts on a timetable," said US National Security Advisor Jake Sullivan on Thursday in Italy. - "That's how I expect this to develop.