Ukraine secures USD20B loan from US Federal Financing Bank backed by frozen Russian assets
Date
12/15/2024 4:47:30 AM
(MENAFN) The Ukrainian government has sanctioned the terms of a provisional agreement with the US Federal Financing bank (FFB) for a USD20 billion loan over 40 years, secured by earnings from frozen Russian government assets.
This forms part of a larger USD50 billion loan arrangement by the G7, which includes a distinct USD20 billion commitment from the EU, as well as USD10 billion to be divided among G7 members Britain, Japan, and Canada.
The funds will be directed to the Facilitation of Resources to Invest in Strengthening Ukraine financial Intermediary Fund, a World Bank initiative set up on October 10, “for the benefit of the state,” according to a resolution issued by Ukraine’s Cabinet of Ministers on Friday.
The transfer will follow a Certificate Purchase Agreement between Ukraine, the FFB, and the US Agency for International Development (USAID), in addition to a loan guarantee and repayment contract between Ukraine and USAID.
As per the agreement, Ukraine’s Ministry of Finance will issue a certificate of debt to the FFB, with USAID providing a guarantee, the government resolution indicated.
The loan, carrying an annual interest rate of 1.3 percent plus the prevailing average rate for one-year US Treasury bills, will be repaid using the profits derived from immobilized Russian sovereign assets.
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