Ukraine’s Finance Ministry and the World Bank signed a grant agreement on Thursday worth $690.8 million, funded by Japan and Canada through proceeds generated from frozen Russian assets under an Extraordinary Revenue Acceleration (ERA) Loan.
Signed in autumn 2024, the ERA Loan is the key macrofinancial assistance for Ukraine, helping Kyiv to sustain core state functions during wartime. The tranche represents Canada’s final contribution under the ERA instrument and Japan’s first disbursement.
The funding was secured under the “Supporting Public Expenditures for Sustainable Public Administration in Ukraine” program, known as PEACE in Ukraine, a mechanism set up by the World Bank and Ukraine’s Ministry of Finance.
Ukraine’s Finance Ministry reported the news on Friday.
The agreement was signed on behalf of Ukraine by Finance Minister Serhiy Marchenko and on behalf of the World Bank by Bob Saum, the bank’s regional director for Eastern Europe. The signing ceremony was attended by Japanese Ambassador to Ukraine Masashi Nakagome and Canadian Embassy Deputy Head of Mission Kristiane Roux.
The funds are expected to be transferred to Ukraine’s state budget “in the coming days”, the finance ministry wrote.
How Japan and Canada’s ERA Loan tranches will be used?
According to the finance ministry, the grant will be directed to Ukraine’s general budget fund and used to reimburse critical state expenditure, including pension payments and social assistance programs.
Of the total $690.8 million package, $544 million stems from the Japanese government, $146 million from Canada, and $800,000 from a multi-donor trust fund established under the PEACE in Ukraine program.
Launched in June 2022, PEACE in Ukraine was designed as an emergency response to Russia’s full-scale invasion, providing external financing to ensure the uninterrupted operation of key government functions at both national and regional levels under martial law.
Following the latest disbursement, total funding mobilized through the PEACE in Ukraine program will reach $51.7 billion, the finance ministry reported.
Marchenko framed the grant as a tool to ease pressure on Ukraine’s public finances and reduce reliance on external borrowing.
“I am grateful to the World Bank, as well as the Governments of Japan and Canada, for the grant support provided. These funds will help increase revenues of the general fund of the State Budget and reduce the need for external borrowing. At the same time, they will contribute to strengthening macro-financial stability and reducing the debt burden, while ensuring timely social payments and the uninterrupted functioning of state institutions,” the finance ministry quoted the minister as saying.
What is an ERA Loan, backed by profits of Russian assets?
Ukraine remains heavily dependent on external support as the war enters its fifth year, with budget deficits driven by soaring defense spending. International partners have increasingly turned to frozen Russian assets as a source of longer-term financing – a move Kyiv has welcomed as both economically necessary and politically symbolic.
The ERA Loan is a crucial component of Ukraine’s 2025 financial strategy, backed by profits generated from frozen Russian assets held in Europe.
The program redirects interest earnings from Russia’s immobilized assets toward Ukraine to compensate for the destruction caused by the war. The ERA Loan provides $50 billion in financial assistance that Ukraine will not have to repay.
This initiative was negotiated between Ukraine, the EU, the US, Canada, Japan, and the UK, with joint agreements signed in late 2024. These countries remain the ERA’s major stakeholders.
The ERA Loan became the key pillar to Ukraine’s macro financial stability through 2025.
Ukraine’s Ministry of Finance secured $52.4 billion in external financing in 2025, with more than 70 percent of that total coming through the G7 ERA mechanism backed by revenues generated by frozen Russian assets.
The ministry’s breakdown showed that in 2025, Ukraine’s economy received funds of:
- $37.9 billion from ERA loans
- $12.1 billion through the EU’s Ukraine Facility (including $11.5 billion in loans and $668 million in grants)
- $912 million from the International Monetary Fund (IMF)
- $733 million from the World Bank
- $453 million from Japan
- $232 million from the Council of Europe Development Bank.