Leaders representing the Group of Seven nations are set to announce as soon as Thursday an agreement to loan money to Ukraine backed by the profits from frozen Russian investments, according to sources familiar with the discussions, providing a new source of revenue to a war-torn nation facing a steep and costly road to recovery.
Negotiators had focused discussions on a loan amount of roughly $50 billion, a figure that would represent the annual proceeds on the investments – which generate profit of about EUR 3 billion per year – over the course of 10 years. The loan is expected to be delivered by the end of 2024, which would ensure the money would get to Ukraine before a potential change in US presidents. President Joe Biden is facing off against former President Donald Trump in November’s US presidential election and Trump has refused to commit to sending additional funding to Ukraine.
Western nations froze Russia’s assets in bank accounts located within Europe and the US as part of a massive wave of sanctions enacted after Vladimir Putin ordered the invasion of Ukraine in 2022. Hundreds of billions of assets are frozen in Europe, with just a small amount – roughly $3 billion – located in banks in the US.
That led European officials to raise concerns that they could be on the hook if Ukraine failed to pay back the loan, the investments generated less profit, or the assets get delivered back to Russia as part of a peace deal.
A senior US official says negotiators, who have continued working out final details in Brindisi, Italy, ahead of the G7 leaders’ arrival, have structured the deal so that all countries participating share the risk.
“This loan will mostly be provided by the United States and will be supplemented by money from Europe,” an Élysée source told journalists at a briefing.
“Countries are still discussing how to partition the cost if the profits from Russian assets are not sufficient to cover the need,” the French source added.
The source spoke on the condition of anonymity, citing professional norms in Europe.
“The $50 billion will be transferred before the end of 2024,” the source said.
US national security adviser Jake Sullivan told reporters traveling with Biden to the summit that the discussions were moving toward a “common understanding” of how the loan would be structured, though multiple countries would participate and work out the technical details after the summit.
“I believe that we are making good progress in generating an outcome in which those proceeds from those frozen assets can be put to good use,” Sullivan said.
G7 countries began brainstorming ways to identify longer-term sources of funding for Ukraine in late 2023, as lawmakers delayed in greenlighting the White House’s funding request. Amid doubts on future political and financial wherewithal to continue spending taxpayer money in Ukraine – and facing a calendar stacked with elections on both sides of the Atlantic – officials began zeroing in on the Russian money gathering dust and interest payments in accounts around the world.
Beginning in early 2023, working groups led by Treasury, State and the National Security Council officials held three, two-hour meetings each week beginning at 7 a.m. ET to accommodate time differences around the world.
Banks and clearing houses that hold and process the funds raised concerns that simply taking the money would open up companies and countries alike to lawsuits and retribution from Russia. Utilizing the profits generated while Russia has no access to the money was conceived as a workaround that satisfied international legal concerns.
“It’s the difference between someone seizing your home and renting out your home,” said Tim Adams, president and CEO of the Institute of International Finance.
The United States has provided $175 billion to Ukraine since Russia’s invasion, a total that now surpasses the $171 billion in 2024 dollars that the US provided to the Marshall Plan to rebuild Europe after World War II. The European Union has delivered $107 billion in aid.
The World Bank estimates that Ukraine would need more than $500 billion to rebuild, a figure that climbs each day the war continues.
CNN’s Xiaofei Xu contributed to this report.
