On Tuesday, the U.S. Treasury Department announced the transfer of $20 billion—the U.S. share of a $50 billion G7 loan package for Ukraine to a World Bank intermediary fund dedicated to economic and financial aid.
This move underscores the U.S. commitment to supporting Ukraine in its defense against Russia’s invasion while preemptively safeguarding the funds before the January inauguration of President-elect Donald Trump.
The Treasury’s transfer fulfills an October pledge to match the European Union’s $20 billion contribution to the loan package. Additional smaller contributions from Britain, Canada, and Japan complete the G7 initiative, designed to support Ukraine’s economy and infrastructure amidst the ongoing conflict.
BREAKING: Biden admin greenlights a $50 billion “loan” to Ukraine pic.twitter.com/W6rCPg6XNg
— Libs of TikTok (@libsoftiktok) December 10, 2024
The funds are backed by the interest proceeds from $300 billion in frozen Russian sovereign assets immobilized following Russia’s February 2022 invasion.
The timing of the transfer is notable, as it avoids potential delays or reversals by the incoming Trump administration. Trump has criticized the level of U.S. aid to Ukraine and promised to quickly end the conflict without detailing his plans.
The $50 billion loan package is structured as a 30-year credit agreement. Initially, President Joe Biden’s administration had considered splitting the U.S. contribution into $10 billion for military aid and $10 billion for economic support.
However, the military allocation would have required Congressional approval, a challenging prospect given the Republican Party’s sweeping election victories. Instead, the entire U.S. contribution is now earmarked for nonmilitary purposes.
The Treasury confirmed the funds were deposited into the newly established Facilitation of Resources to Invest in Strengthening Ukraine Financial Intermediary Fund, managed by the World Bank.
This fund was approved by the global lender’s board in October, with Russia as the sole dissenting vote. The World Bank, whose charter prohibits involvement in military operations, has experience managing similar funds, including one for Afghanistan focused on humanitarian and economic aid.
U.S. Treasury Secretary Janet Yellen personally oversaw the $20 billion wire transfer. In a statement, she emphasized the importance of the initiative in sustaining Ukraine’s resilience.
“These funds—paid for by the windfall proceeds earned from Russia’s own immobilized assets—will provide Ukraine a critical infusion of support as it defends its country against an unprovoked war of aggression,” Yellen said.
She further highlighted the broader impact of the G7’s $50 billion commitment. “This initiative will help ensure Ukraine has the resources it needs to sustain emergency services, hospitals, and other foundations of its brave resistance,” she added.
The G7 nations reached agreement on the loan terms in October, prior to Trump’s election, after months of negotiations. The package aims to balance immediate financial assistance with a sustainable repayment structure, ensuring Ukraine’s recovery and stability while leveraging Russian assets to fund its needs.
This transfer marks a critical moment in global efforts to support Ukraine, signaling continued international solidarity and providing a foundation for Ukraine’s economic resilience amid the ongoing conflict.