The EU plans to lend Ukraine €35 billion, backed up by the revenues of Russian assets frozen in the bloc, European Commission chief Ursula von der Leyen has said.
"We are now confident that we can deliver this loan to Ukraine very quickly, a loan that is backed by the windfall profits from immobilised Russian assets," Ms von der Leyen said, speaking alongside Ukraine's President Volodymyr Zelensky in Kyiv.
The loan is part of a wider plan among G7 nations to raise funds using proceeds from Russian assets frozen to sanction the country for invading its neighbour.
"Relentless Russian attacks means Ukraine needs continued EU support," Ms von der Leyen said in a post on X.
Ukraine is facing huge financial needs after more than two years of intensive warfare that have devastated its infrastructure.
Russia has knocked out about 9 gigawatts (GW) of Ukraine's energy infrastructure.
The Group of Seven countries (G7) froze around $300bn worth of Russian financial assets soon after Moscow's invasion of Ukraine in 2022.
They pledged to use the funds to help their ally, but spent months discussing how exactly such a mechanism could work.
The EU in May struck a deal among its member states under which 90% of the proceeds would go into an EU-run fund for military aid for Ukraine, with the other 10% going to support Kyiv in other ways.
The assets are gaining exceptional interest because they are stuck, resulting in so-called windfall profits. Ukraine is expected to receive the first tranche in July, EU diplomats said.
Yesterday Ms von der Leyen said that the sum of €160m from the proceeds of frozen Russian assets would be allocated to meet Ukraine's urgent humanitarian needs for this winter.
Relentless Russian attacks means Ukraine needs continued EU support.
— Ursula von der Leyen (@vonderleyen) September 20, 2024
The @EU_Commission will provide a loan of up to 35 billion euros to Ukraine as part of the G7 pledge.
This is another major EU contribution to the Ukraine's recovery.
Russia's invasion of Ukraine has dragged on for more than 30 months, with Ukraine now controlling parts of Russia's Kursk region while Moscow presses an advance into eastern Ukraine.
Ukraine has lobbied its allies to allow it to use donated weapons to strike "legitimate" military targets deep in Russian territory.
The US and Britain have been discussing allowing it to do just that - but EU states remain divided over the issue.
The European Parliament yesterday adopted a resolution calling on EU countries to allow Kyiv to use Western weapons to strike military targets inside Russia.
Washington currently authorises Ukraine to only hit Russian targets in occupied parts of Ukraine and some in Russian border regions directly related to Moscow's combat operations.
Meanwhile, Mr Zelensky has said that Ukraine's "victory plan" in the war against Russia depends on quick decisions being taken by allies this year.
Speaking during the joint press conference with Ms von der Leyen, the Ukrainian president said that Ukraine planned to use the proposed multi-billion dollar EU loan for air defence, energy and domestic weapons purchases.
Mr Zelensky singled out the importance of US President Joe Biden to the victory plan, which he said the two leaders will discuss when they meet. The Ukrainian leader is travelling to the United States next week.
World leaders to gather at UN as crises grow and conflicts rage
World leaders will meanwhile descend on the UN's New York HQ from Sunday for the organisation's annual signature gathering against a backdrop of raging wars, growing populism and diplomatic deadlock.
The summit will be followed by the high-level week at which the UN's 193 members will address each other, kicking off with Brazil.
That will be followed by the United States, with US President Joe Biden due to speak.
The leaders of China and Russia will be absent as in past years, but Mr Zelensky, Britain's Keir Starmer and Brazil's Luiz Inacio Lula da Silva will be present.
Mr Zelensky was the star attraction in 2023, but one diplomat said he would struggle to stay in the spotlight this year as he presents his "plan for victory".
Ahead of the gala events, a security ring of steel was being erected around the UN's riverfront HQ and local people and businesses braced for traffic paralysis caused by the endless VIP motorcades and street closures.
Latest developments from Ukraine
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