Ukraine’s Finance Minister Sergiy Marchenko has signed an agreement with the European Union to establish the Ukraine Loan Cooperation Mechanism (ULCM), which will allow the proceeds of frozen Russian assets to be used to repay loans of up to €45 billion.
According to the Ministry of Finance of Ukraine, the new mechanism creates a legal framework for servicing and repayment of funds received from international creditors under the G7 ERA (Extraordinary Revenue Acceleration Loans for Ukraine) initiative. This will allow Ukraine to use part of the proceeds from Russia’s frozen sovereign assets to cover the principal, interest and costs associated with the loans.
Thanks to the ULCM, Ukraine will be able to receive significant financial resources to be used to repay the relevant loans. Funds available through this mechanism are earmarked and can only be used to cover debts provided by partner countries under the G7 ERA initiative.
This move is an important part of the economic support for Ukraine in the context of the war, as well as part of global efforts to limit Russia’s economic opportunities by freezing its assets.
