On January 10, the European Commission disbursed the first tranche of 3 billion euros under the special Macro-Financial Assistance (MFA) programme for Ukraine.
The loan will be repaid with revenues from Russian state assets frozen in the EU.
The loan package, amounting to €18.1 billion, represents the EU's contribution to the G7-led Special Revenue Acceleration (ERA) initiative, which aims to provide around €45 billion in financial support to Ukraine.
Reuters quoted European Commission President Ursula von der Leyen as saying on January 10: "Today, we transfer 3 billion euros to Ukraine, the first tranche from the EU's share of the G7 loan package. This gives Ukraine the financial strength to continue fighting for freedom and victory."
Ukrainian Prime Minister Denys Shmyhal also confirmed the transfer in a statement on Telegram.
The bulk of the funds for the loan come from interest on the Russian Central Bank’s frozen assets in EU countries, estimated at €210 billion. These assets have been frozen since February 2022 as part of sanctions against Russia over the conflict in Ukraine.
Due to transactions involving prohibited assets, the interest accruing on these amounts has generated extraordinary revenues, estimated at €2.5-3 billion per year, depending on the interest rate. The EU Council has decided to use these extraordinary revenues to support Ukraine, with €1.5 billion disbursed by the end of July 2024.
Since Russia launched its extraordinary military operation in February 2022, the EU and its member states have provided nearly €134 billion in support for Ukraine. The package includes economic support, early infrastructure reconstruction, humanitarian aid and refugee assistance.
Russia has strongly condemned the sanctions and the use of frozen assets, calling them “international theft”. However, the EU has stressed that the funds will never be returned to Russia, even if the freeze ends.
The use of frozen Russian assets to support Ukraine is expected to continue to cause geopolitical tensions and strong reactions from Moscow.
