G7 Agrees to $50 Billion Ukraine Loan Backed by Russian Assets. How Will It Work?

The United States and the other large Group of 7 economies agreed on Thursday on a plan to give Ukraine a $50 billion loan to help it buy weapons and begin to rebuild damaged infrastructure. The move comes at a crucial moment in the war, when Russia has the momentum on the battlefield.

The details are not fully worked out, but this is what we know.

Where will the money come from?

The upfront money for the loan will come from the United States, the European Union and other G7 countries, though the details on how much each entity contributes is being worked out.

The idea is to use the nearly $300 billion in Russian assets in the West, frozen after Moscow’s invasion of Ukraine in February 2022, as the basis for the loan. The money will be repaid over time with the profits earned from those Russian assets, about two-thirds of which are in Europe.

Many of the assets are in bonds that have matured, creating interest of, depending on the interest rate, $3 billion to $4 billion a year.

Rather than just providing Ukraine that yearly sum, which is relatively small given the war’s demands, the G7 countries agreed on the loan, which could be provided to Ukraine by the end of the year.