Ukraine outlines conditions for accessing $20 bln in seized Russian assets
Photo: US will provide Ukraine with $20 bln against Russian assets (Getty Images)
Ukraine plans to receive $20 billion from the United States through a special fund of the World Bank. Kyiv will not return these funds unless it receives reparations from Russia, according to the Resolution of the Cabinet of Ministers of December 6, 2024, No. 1388.
The resolution approves the main terms of a transaction with contingent liabilities, as a result, Ukraine is granted a 40-year loan from the US Federal Financing Bank of up to $20 billion.
The transaction with contingent liabilities is carried out by entering into a Certificate Purchase Agreement, a Loan Guarantee and Repayment Agreement, between Ukraine, the Federal Financing Bank, and the United States Agency for International Development (USAID).
The loan is disbursed by transferring funds to the Facilitation of Resources to Invest in Strengthening Ukraine Financial Intermediary Fund, which the World Bank established on October 10, 2024.
The loan is repaid and serviced from sources other than Ukraine's state budget, including the proceeds from the Russian Federation's frozen assets, in accordance with the Credit Cooperation Mechanism for Ukraine, as defined by the agreement with the EU.
“The Federal Financing Bank or USAID has a limited right to demand repayment of the loan at the expense of the state budget, particularly in the case of compensation to the state budget for damage caused by the armed aggression of the Russian Federation against Ukraine,” the resolution says.
The final repayment of the loan is due 40 years from the date of issuance of the debt certificate.
The Federal Finance Bank (FFB) is a US government corporation established by Congress in 1973. It is under the general supervision of the Secretary of the Treasury.
Contingent loan against Russian assets
In October of this year, the European Union and the G7 countries decided to collectively provide loans of up to EUR 45 billion (approximately USD 50 billion) to support Ukraine's urgent budgetary, military, and reconstruction needs.
The loans will be serviced and repaid from future proceeds from the frozen assets of the Russian Central Bank.
On December 3, the Verkhovna Rada amended the Budget Code to allow Ukraine to receive $50 billion from the G7 countries against Russian assets. The law introduces a new concept - “conditional debt obligations.”
The document stipulates that the money will not be accounted for as Ukraine's public debt. Ukraine will not repay this loan until it receives reparations from Russia.
US Secretary of State Anthony Blinken said the first tranches of the $50 billion loan will be transferred to Ukraine in the coming weeks.
The Federal Finance Bank (FFB) is a US government corporation established by Congress in 1973 under the general supervision of the Secretary of the Treasury.
