Ukraine has received another €4bn ($4.7bn) as a seventh tranche from the EU under the G7-backed Extraordinary Revenue Acceleration (ERA) initiative, Ukraine’s Prime Minister Yulia Svyrydenko reported on Oct. 1.
It is another payment to Ukraine through the ERA, financed by interest income from Russian assets frozen following the country’s full-scale invasion of Ukraine. Ukraine still aims to obtain the principal €210bn ($227bn ) in immobilized Russian central bank assets.
The timing is symbolic: the transfer arrived on Ukraine’s Defenders Day.
“The tranche is secured by the proceeds from the frozen assets of the Central Bank of Russia in the European Union and is for us an important signal about the determination of Europe to strengthen the defense capability of Ukraine and to provide long-term support”, Svyrydenko wrote on Telegram.
The EU’s total contribution under ERA is €18.1bn ($20bn). Under the program, G7 countries agreed to deliver up to $50bn in support to Ukraine through 2025.
The Ministry of Finance of Ukraine reported that the EU has already disbursed €14bn ($16.38bn) within the ERA loan.
“The remaining funds are expected to be received by Ukraine from the EU by the end of 2025”, the Ministry of Finance wrote in a separate press release.
“Since February 2022, the EU has been the largest provider of direct budgetary support to Ukraine – €62.5bn ($73.1bn). The ERA funds have become an important tool to meet budgetary needs in 2025. I am grateful to the European Commission for understanding Ukraine’s needs and for its proactive stance on this matter. The issue of further use of frozen Russian assets for Ukraine’s needs remains on the agenda in meetings with European colleagues,” the press release said, quoting Minister of Finance Serhiy Marchenko.
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 EU.
Its key aim is to make Russia pay for its full-scale invasion of Ukraine.
“In 2024–2025, G7 countries and the EU have already provided nearly $28bn in financing to Ukraine under the ERA”, the Finance Ministry wrote.
Meanwhile, the EU is considering a new plan to provide loans to Ukraine using Russia’s frozen central bank assets, referred to as “reparation loans.”
Under the proposal, Russia would keep its legal claim on the funds, which would be converted into bonds. Ukraine would receive loans that might not need repayment if Russia fails to cover war damage, according to sources cited by Bloomberg.
The EU’s proposed “reparation” loan to help Ukraine fund its war effort by drawing on the value of frozen Russian assets could reportedly be as much as €130 billion euros ($153 billion).