G7 allies are moving ahead with a $50 billion loan for Ukraine backed by frozen Russian funds

The White House says Group of Seven allies are moving forward with providing Ukraine with $50 billion in loans for Ukraine backed by frozen Russian assets

G7 allies are moving ahead with a $50 billion loan for Ukraine backed by frozen Russian fundsBy AAMER MADHANI and FATIMA HUSSEINAssociated PressThe Associated PressWASHINGTON

WASHINGTON (AP) — The White House said Wednesday that Group of Seven allies are moving forward with providing Ukraine with $50 billion in loans for Ukraine backed by frozen Russian assets.

Leaders of the wealthy democracies agreed earlier this year to engineer the mammoth loan to help Ukraine in its fight for survival after Russia’s invasion. Interest earned on profits from Russia’s frozen central bank assets would be used as collateral.

Daleep Singh, the White House deputy national security adviser on international economics, said the United States plans to provide a loan of $20 billion. The additional $30 billion will come from the European Union, the United Kingdom, Canada and Japan. among others.

“To be clear, nothing like this has ever been done before,” Singh said. “Never before has a multilateral coalition frozen the assets of an aggressor country and then harnessed the value of those assets to fund the defense of the aggrieved party all while respecting the rule of law and maintaining solidarity.”

Singh said that the Biden administration intends to divide its share between aiding Ukraine’s economy and military. It will require congressional action to send military aid.

“To be clear, either way, the U.S. will provide $20 billion in support for Ukraine in this effort, whether it’s split between economic and military support or provided entirely via economic assistance,” Singh said.

Singh said more details about the loan are expected to be ironed out during this week’s G-7 finance ministers’ meeting in Stresa, Italy.

The G7 announced in June that most of the loan would be backed by profits being earned on roughly $260 billion in immobilized Russian assets. The vast majority of that money is held in European Union nations.

The decision came after months of debate on the legality of confiscating the money and sending it to Ukraine.

The U.S. and its allies immediately froze whatever Russian central bank assets they had access to when Moscow invaded Ukraine in 2022.