It comes two weeks after the US Treasury Department paid $20 billion into a World Bank fund for transfer to Ukraine. The EU has pledged to contribute an additional $20 billion to the fund, while G7 members Britain, Japan, and Canada will add another $10 billion, for a total of $50 billion that will theoretically be repaid over 40 years.
The loan was funded by interest earned from immobilized Russian sovereign assets. An estimated $300 billion worth belonging to the Russian central bank was frozen by the US and its allies following the escalation of the Ukraine conflict in February 2022.
“We expect that all sovereign Russian assets will be confiscated and used to rebuild Ukraine,” Shmigal wrote in a post on X.
In a separate announcement on Tuesday, Shmigal said that Ukraine had also received $1 billion from Japan and the UK via the same World Bank program.
Ukraine’s government, military, and public services have been entirely dependent on foreign aid since 2022, and the cost of sustaining the conflict with Russia has driven the country’s finances into disarray. Last month, Ukrainian leader Vladimir Zelensky signed next year’s budget into law. It anticipates revenues of $49 billion and expenditures of $87 billion, an overall deficit of $37 billion.
The International Monetary Fund (IMF) has warned that the seizure of Russian assets will undermine global confidence in the US and its allies, while the Kremlin has repeatedly denounced the asset freeze as “theft” and argued that tapping into these funds would be illegal and set a dangerous precedent.
Kremlin spokesman Dmitry Peskov has warned that Moscow will take legal action against those involved in the asset seizure.
