UK to allocate US$3bn in profits from frozen Russian assets to strengthen Ukraine's defence
The UK Ministry of Defence, the Ukrainian Ministry of Defence and the Ministry of Strategic Industries of Ukraine have signed a project agreement on the use of windfall profits from frozen Russian assets under the Extraordinary Revenue Acceleration (ERA) initiative to arm and repair equipment for Ukraine.
Source: European Pravda, as reported by the press service for the Ministry of Defence of Ukraine
Details: "This funding is valuable not only in practical terms, but also as a matter of principle. The use of excess profits from Russian assets to reinforce Ukraine’s defence is a just response to aggression and an acknowledgement of Ukraine’s right to self-defence," First Deputy Defence Minister Serhii Boiev said.
Under the agreement, Ukraine will receive US$3 billion between 2025 and 2026. The funds will be used to purchase foreign-made defence products, repair and maintain military equipment, implement joint projects involving Ukrainian and international defence companies, and purchase other critically essential materials, including Ukrainian-made products.
"Ukrainian enterprises have a production capacity of $35 billion, but insufficient funding prevents their full utilisation. Therefore, leveraging excess profits generated from frozen Russian assets will significantly boost the production and repair capacities of Ukraine’s defence industry," noted Davyd Aloian, Deputy Minister for Strategic Industries of Ukraine.
Background:
- In 2024, the G7 agreed to jointly provide Ukraine with a loan of US$50 billion from Russian assets: the funds will be formally provided as a loan but will be repaid from the proceeds of frozen Russian assets.
- In May, the European Commission disbursed the fourth tranche of macro-financial assistance to Ukraine in the amount of €1 billion under the G7’s ERA initiative, which provides financial resources to Kyiv from the proceeds of frozen Russian assets.
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