Ukraine received the next €1 billion (almost $1.2 billion) tranche from the European Union under the G7-backed Extraordinary Revenue Acceleration (ERA) initiative, the Ukrainian Ministry of Finance reported on July 10.
According to the Ministry, Ukraine will use the disbursement for priority State Budget expenses in the social and defense sectors.
It is the sixth 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 a crucial and timely investment in strengthening Ukraine’s financial resilience, enhancing our ability to resist the aggressor, and ensuring the proper functioning of essential public services,” Ukraineʼs Minister of Finance Sergiy Marchenko said.
The EU’s total contribution to the ERA mechanism is expected to reach €18.1 billion ($20 billion) as part of a broader G7 commitment to deliver up to $50 billion in support to Ukraine through 2025.
Ukraine has already received €8 billion ($9.4 billion) from the EU under the ERA initiative.
According to the Ministry, the European Union has been the largest provider of direct budgetary support to Ukraine, allocating a total of €53.5 billion ($62.6 billion) for priority State Budget needs.
The ERA initiative is designed to repurpose profits generated from approximately €210 billion ($237 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 ($2.8-3.4 billion) annually, depending on market rates – are redirected to support Ukraine without creating additional debt burden.
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.