Media reports Japan to transfer billions to Ukraine with frozen Russian assets
Date
7/18/2024 8:26:54 AM
(MENAFN) In a significant move of international financial support, Japan is set to provide 520 billion yen (approximately USD3.3 billion) in loans to Ukraine. These funds will be sourced from Russian assets that have been frozen under Western sanctions, as reported by Kyodo news agency citing diplomatic sources.
The initiative forms part of a broader USD50 billion loan agreement pledged by the Group of Seven (G7) nations during their summit in Italy earlier this year. The G7 leaders agreed to utilize interest accrued from frozen Russian funds to aid Kiev in purchasing weapons and reconstructing vital infrastructure damaged by the ongoing conflict.
According to Kyodo's diplomatic sources, Japanese authorities are expediting the necessary procedures to ensure the timely implementation of their financial commitment by the end of this year. The loan package is expected to receive approval from G7 finance ministers and central bank chiefs during their upcoming meeting in Rio de Janeiro. The package includes USD20 billion contributions each from the United States and the European Union, with Japan, the United Kingdom, and Canada collectively contributing USD10 billion.
Following the escalation of the Ukraine conflict in 2022, Western nations collectively froze nearly $300 billion in assets belonging to the Central Bank of Russia. The majority of these funds are held within the European Union, particularly under the management of Euroclear, a Belgium-based depositary and clearing house.
Earlier decisions by the European Union have focused on using windfall profits generated from these frozen assets to bolster Ukraine's recovery efforts and enhance its military defenses. Under the approved plan, 90 percent of the proceeds will be channeled into an EU-administered fund designated for Ukrainian military aid, while the remaining 10 percent will support Kiev in other strategic capacities.
This collaborative effort underscores the international community's solidarity with Ukraine amidst ongoing geopolitical tensions and highlights Japan's proactive role in providing substantial financial assistance to support stability and reconstruction in the region.
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