UK to give Ukraine $2.9 billion military loan, to be repaid with proceeds from frozen Russian assets

London will grant Ukraine a loan worth £2.26 billion ($2.9 billion) backed by profits from frozen Russian assets, the British government announced on October 22.

The funds are the UK’s contribution to the Group of Seven (G7) initiative to provide kyiv with a $50 billion loan by the end of the year, which will be repaid using interest from billions in frozen Russian assets.

The UK loan will be used for Ukraine’s military spending. kyiv will be able to invest in key equipment to fight Russia, such as artillery, air defense and broader material support, the statement said.

“These new funds are in Britain’s national interest because the first line of our defense – the defense of our democracy and our shared values ​​– is in the Ukrainian trenches,” said Rachel Reeves, British Chancellor of the Exchequer.

“A safe and secure Ukraine is a safe and secure United Kingdom.”

British Defense Minister John Healey said the money could be used to help kyiv develop long-range drones capable of traveling further than some missiles.

This aid is in addition to the UK’s annual aid to Ukraine of 3 billion pounds ($3.9 billion).

European countries hold about two-thirds of Russia’s $300 billion in sovereign assets tied up after the outbreak of full-scale war. While hesitant to outright confiscate the assets, the EU devised a plan to use the windfall profits to finance Ukraine’s reconstruction and defense needs.

Under the G7 plan, profits from Russia’s frozen assets will gradually be used to repay the multibillion-euro loan. EU officials said the 35 billion loan would be “non-designated” and “non-targeted”, allowing Ukraine maximum flexibility in how it spends the funds.

The EU hopes to start distributing the money early next year.

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