EU pledges $39 billion loan to Ukraine for economic and infrastructure recovery

In Kyiv, von der Leyen announced a $39 billion loan package for Ukraine's reconstruction and power grid repairs, backed by frozen Russian assets.

Sep 20, 2024 - 12:00

EU pledges $39 billion loan to Ukraine for economic and infrastructure recovery

eu pledges $39 billion loan ukraine economic infrastructure recovery president volodymyr zelenskyy (r) meeting european commission ursula von der leyen (l) kyiv 20 september 2024 presidentgovua 08c941d3864053683040bf43c132e9a5_1726825968_extra_large

On 20 September, the European Union announced a significant loan package for Ukraine, pledging up to 35 billion euros ($39 billion) to help rebuild the country’s economy and war-damaged power grid. This loan is part of a larger $50 billion aid package organized by the Group of Seven (G7) major industrial nations.

Since Russia’s full-scale invasion began in February 2022, the EU has provided Ukraine with more than 118 billion euros ($132 billion) in military and economic assistance.

AP reports that European Commission President Ursula von der Leyen, speaking at a news conference in Kyiv alongside Ukrainian President Volodymyr Zelenskyy, stated,

“We should make Russia pay for the destruction it caused,” she said, emphasizing that the loan would flow directly into Ukraine’s national budget, providing “significant and much-needed fiscal space” and allowing Ukraine to decide how best to use the funds.

The loan package is designed to be underwritten by windfall profits earned on nearly $300 billion in Russian assets frozen due to the invasion of Ukraine. Von der Leyen expressed confidence in the EU’s ability to deliver the loan to Ukraine quickly and hoped that other G7 countries would follow suit.

President Zelenskyy outlined his priorities for the funds, including rebuilding Ukraine’s energy network, constructing more bomb shelters, improving schools, and purchasing weapons and ammunition.

Von der Leyen highlighted the urgent need for support, noting that around half of Ukraine’s energy infrastructure has been destroyed during the war. The EU aims to help Ukraine decentralize its power grid and become less reliant on large power stations that are easier targets for Russian forces.

The European Commission President also announced an additional 160 million euros ($180 million) to help fortify Ukraine’s energy network, with 100 million euros ($112 million) coming from windfall profits earned on frozen Russian assets.

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