FT Reports US Condition for Extending Loan to Kyiv Using Russian Assets

The United States is prepared to extend a $50 billion loan to Ukraine, sourced from revenues generated from Russian assets, provided that the EU agrees to indefinitely extend sanctions against Moscow, according to the Financial Times.

Russia has warned that any such measure would be considered "theft." The proposed $50 billion loan would be tied to the EU's decision to extend sanctions on Moscow indefinitely, as indicated by a contentious document cited by the Financial Times.

According to the publication, Washington needs these measures from Brussels because the sanctions’ expiration is set for every six months and must be renewed unanimously until the conflict in Ukraine ends. This policy shift would place the responsibility for loan repayment onto the United States.

The EU would need to ensure that Russian assets remain frozen as long as "Moscow has not agreed to compensate for the damage caused to Ukraine," the document states.

Another scenario suggests that G7 countries would provide Ukraine with bilateral loans secured by profits from Russian assets in each jurisdiction. This would require the EU to tap into its “resilience fund” and also seek unanimous approval from member states, as written by the Financial Times.

The US plans to reach an agreement with the EU on this matter ahead of the upcoming G7 leaders' summit in Italy next week, according to the publication. The financing mechanism for Ukraine, based on revenues from frozen Russian assets, is expected to be a central theme of the event.

The document also states that details on the loan repayment term, interest rate, and delivery method (directly or through an intermediary like the World Bank) need to be addressed.

Sources within the publication highlighted concerns from several European nations that could have financial ramifications for issuing guarantees on extending sanctions. "The Americans will likely have to come to terms with the fact that the EU cannot provide ironclad guarantees for damages," the source said.

The idea of extending a loan to Ukraine from revenues derived from Russian assets was previously mentioned by US Treasury Secretary Janet Yellen. Sources from Reuters have also noted the $50 billion amount.