- UK announces £2.26 billion loan to Ukraine backed by profits from sanctioned Russian sovereign assets
- Forms Britain’s contribution to the $50 billion loan announced at the G7 Leaders’ Summit in June
- New money for Ukraine will bolster equipment on the frontline
The new £2.26 billion is the UK’s contribution to the G7 Extraordinary Revenue Acceleration (ERA) Loans to Ukraine scheme, in which $50 billion from G7 countries will be delivered to Ukraine for its military, budget and reconstruction needs. The loan will be repaid using the extraordinary profits on immobilised Russian sovereign assets.
The Chancellor Rachel Reeves made the announcement alongside Defence Secretary John Healey while visiting Ukrainian personnel who are being trained in the UK. More than 45,000 personnel have been trained in the UK under Operation INTERFLEX and the scheme has been extended to at least the end of 2025.
The UK’s £2.26 billion loan is earmarked as budgetary support for Ukraine’s military spending, enabling the Ukrainians to invest in key equipment to support their efforts against Russia, such as air defence, artillery and wider equipment support. It comes on top of the UK’s existing £3 billion a year military aid for Ukraine, which the Prime Minister re-committed to within his first week in office.
The UK has sent around 400 different capabilities to Ukraine, with Defence Secretary John Healey MP recently announcing that the UK will supply 650 Lightweight Multirole Missile systems to Ukraine to boost the country’s air defences.
Chancellor of the Exchequer Rachel Reeves, said:
Our support for Ukraine and her men and women in their fight for freedom from Putin’s aggression is unwavering and will remain so for as long as it takes.
This new money is in Britain’s national interest because the frontline of our defence – the defence of our democracy and shared values – is in the Ukrainian trenches. A safe and secure Ukraine is a safe and secure United Kingdom.
The $50 billion G7 ERA scheme was first announced at the G7 Leaders’ Summit in Apulia, Italy, in June this year. Russia’s obligation under international law to pay for the damage it has caused to Ukraine is clear and this G7 agreement is an important step to ensuring this happens. Today the UK has announced its contribution to the scheme and will introduce domestic legislation in the coming weeks to enable the transfer of the new funds to Ukraine as quickly as possible.
The loan is on top of the £12.8 billion already committed in military, economic and humanitarian support to Ukraine.
The funding comes alongside the UK and international partners introducing the largest and most severe package of sanctions ever imposed on a major economy. Without this, Russia would have over $400 billion more for its war machine – enough to fund its illegal invasion for a further four years. The war is having an economic and human cost for Russia; it is soaking up 40% of Russia’s annual budget and last month the country suffered its highest rate of daily casualties since the war began.
The loan announcement comes ahead of the Chancellor’s attendance of the International Monetary Fund Annual Meetings in Washington D.C. later this week, at which she will underline on the international stage that the UK and its partners stand united and will not let aggressors like Putin succeed. Earlier this month Prime Minister Keir Starmer hosted Ukrainian President Volodymyr Zelenskyy in Downing Street to discuss his victory plan for Ukraine.
Defence Secretary John Healey, said:
By using the money generated from these sanctioned Russian assets, we can help turn the tables on Putin’s war machine. This urgent funding will directly support Ukraine’s defence using the proceeds from assets that had helped fuel Putin’s aggression.
The UK is stepping up our support to Ukraine, speeding up supplies of vital equipment and boosting our defence industries. We will stand with Ukraine for as long as it takes.