Rachel Reeves to bankroll Ukraine war effort using £2.26bn profits from frozen Russian assets
22 October 2024, 09:10 | Updated: 22 October 2024, 13:56
The UK is giving Ukraine a loan of £2.26 billion to help fund the war effort against Russia using profits from frozen Russian assets
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The money is the UK's part of a $50 billion (£38.39 billion) loan agreed by the G7 countries.
It's financed through the interest on sanctioned Russian sovereign assets - seen as a way of getting the Kremlin to pay back some of the damage that its forces have inflicted on Ukraine over the past two and a half years.
But this indirect way is seen as legally less risky than simply giving Ukraine the frozen Russian assets.
The money could be used to fund air defence, artillery or other military equipment and comes on top of the UK's existing £3 billion-a-year support for Ukraine.
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Defence Secretary John Healey said: "By using the money generated from these sanctioned Russian assets, we can help turn the tables on Putin's war machine.
"This urgent funding will directly support Ukraine's defence using the proceeds from assets that had helped fuel Putin's aggression."
The G7 - the UK, US, Canada, Japan, France, Germany and Italy, along with the EU - agreed in June to the loan, using the interest from Russian state funds frozen as a result of sanctions.
In the immediate aftermath of Mr Putin's invasion of Ukraine in 2022, Russian central bank assets held overseas were frozen by the allies and the G7 agreed to use the interest on more than £200 billion of immobilised funds to support Kyiv's resistance.
UK's £2.26bn loan for Ukraine 'can help turn the tables on Putin's war machine'
Chancellor Rachel Reeves said: "Our support for Ukraine and her men and women in their fight for freedom from Putin's aggression is unwavering and will remain so for as long as it takes.
"This new money is in Britain's national interest because the front line of our defence - the defence of our democracy and shared values - is in the Ukrainian trenches. A safe and secure Ukraine is a safe and secure United Kingdom."
The government did not confirm when the money would be sent to Ukraine, but said that more details would be disclosed in the Budget next Wednesday.
"The government will introduce new laws within weeks to enable the transfer of the new funds to Ukraine as quickly as possible," Ms Reeves said.
"The UK is stepping up our support to Ukraine, speeding up supplies of vital equipment and boosting our defence industries. We will stand with Ukraine for as long as it takes."
