On December 24, 2024, it was reported that approximately $281 billion in Russian assets, including Central Bank reserves, remain frozen due to sanctions imposed following Russia's invasion of Ukraine in February 2022. The G7 and EU, which control the majority of these assets, have agreed to support a $50 billion loan to Ukraine using proceeds from these frozen funds, although they have not yet granted direct access to the assets.
EU's new top diplomat, Kaja Kallas, has advocated for the direct use of these frozen Russian state funds to assist Ukraine. The financing for this initiative comes through the World Bank's Second Growth Foundation Development Policy Loan, representing the initial portion of a $20 billion US Extraordinary Revenue Acceleration loan.
This initiative is part of the broader G7 commitment to provide Ukraine with $50 billion secured by immobilized Russian sovereign assets. The funds are being disbursed via the World Bank's Facilitation of Resources to Invest in Strengthening Ukraine Financial Intermediary Fund (FORTIS Ukraine FIF).
The United States Agency for International Development (USAID), in collaboration with the US Treasury and State Department, has facilitated the grant, contributing to the approximately $30 billion in direct budget support provided to Ukraine from 2022 to 2024.
Ukraine's Minister of Finance, Serhii Marchenko, expressed gratitude for the support, stating, 'For the first time, Ukraine is receiving funds financed by proceeds from the frozen assets of Russia. I am deeply grateful to the United States for its quick decision-making and adaptable solutions in support of Ukraine.'
The Development Policy Loan aims to support systemic reforms in Ukraine, with funds being released contingent on the completion of agreed reform milestones. Key focus areas include railways, customs and tax policy, anti-corruption measures, state-owned enterprises, and private sector development. The Finance Ministry has indicated that transparency in the use of budget support will be monitored through cooperation with the USAID SOERA project and DBS Audit Activity.