Ukraine received a €1 billion ($1.08 billion) disbursement from the European Union under the G7-backed Extraordinary Revenue Acceleration (ERA) initiative, Prime Minister Denys Shmyhal announced following a meeting in Brussels with European Commissioner Valdis Dombrovskis on Wednesday, April 9.
The tranche will be directed toward covering “priority state budget expenditures,” the press release said.
It is the third payment to Ukraine through the ERA, financed by interest income from frozen Russian sovereign assets. The assets were frozen following Russia’s full-scale invasion of Ukraine in February 2022. Ukraine still aims to get the principal €210 billion ($227 billion) in immobilized Russian central bank assets.
“This is another step that demonstrates the solidarity of our partners. Our priority is the complete confiscation of frozen Russian sovereign assets, which should serve as a long-term source of funding for Ukraine’s reconstruction,” Shmyhal said following the meeting.
Meanwhile, the European Union has submitted a request to release a second tranche of windfall profits worth €2.1 billion ($2.26 billion), generated from the same pool of frozen Russian assets.
According to a decision by the Council of the EU, the funds will be allocated as follows:
- €900 million ($973 million) – for the procurement of defense products from selected EU member states
- €1 billion ($1.08 billion) – for the acquisition of Ukrainian-made defense equipment, boosting the country’s domestic defense industrial capacity
- €200 million ($216 million) – via the Ukraine Facility, to support recovery and reconstruction projects
The ERA initiative is designed to repurpose profits generated from approximately €210 billion ($227 billion) in immobilized Russian central bank assets, most of which are held within the European Union. Revenues from these assets – estimated at €2.5–3 billion ($2.7–3.25 billion) annually depending on market rates – are redirected to support Ukraine without creating additional debt burden.
The EU’s total contribution to the ERA mechanism is expected to reach €18.1 billion ($19.5 billion) as part of a broader G7 commitment to deliver up to $50 billion in support to Ukraine through 2025.
Unlike previous aid packages, funds under the ERA program are not loans and do not add to Ukraine’s external debt. Its key aim is to make Russia pay for its full-scale invasion of Ukraine.