Russia is beginning to pay for its war on Ukraine – literally. Canada has transferred CAD 2.3 billion (nearly $1.7 billion) to Kyiv under a new G7 plan using proceeds from frozen Russian assets.
The cash will finance the state budget directly, Ukraine’s Ministry of Finance reported on June 30.
Kyiv received the tranche from Ottawa under the G7 Extraordinary Revenue Acceleration (ERA) for Ukraine initiative.
The total share of Canada’s contributions to the ERA Loan totals CAD 5.0 billion ($3.7 billion), of which CAD 4.8 billion ($3.5 billion) has already been transferred to Ukraine’s State Budget.
“We continue to work closely with our international partners to implement a mechanism that holds Russia financially accountable for its crimes in Ukraine,” the press release quotes Ukraine’s Finance Minister Sergii Marchenko. “It is a significant contribution to supporting Ukraine’s financial stability, helping to cover critical State Budget expenditures.”
After months of negotiations, the G7 countries agreed to create a tool that will enable payments from the Russian central bank’s immobilized sovereign assets. They were frozen after Russia’s full-scale invasion of Ukraine in 2022.
The total value of the Russian assets varies between $210 billion and $300 billion.
Out of the €45 billion ($50 billion) ERA loan, $40 billion has already been transferred. Britain announced it contributed £2.26 billion ($3 billion). The US agreed to provide $20 billion.
The European Union will allocate up to €35 billion ($37.84 billion). The total could be less, and it remains unclear how much the EU will disburse and permit Ukraine to spend on its defense.
The loan is structured to help finance Ukraine’s financial needs in 2025, if the wartime expenditures stay at the same level throughout 2025 – if there are no new major shocks.