Ukraine received 2.5 billion Canadian dollars (nearly $1.7 billion) – its first tranche from Canada under the G7 Extraordinary Revenue Acceleration for Ukraine (ERA) initiative – wherein Russia is made to pay for its invasion of Ukraine.
The cash will finance the state budget directly, Ukraine’s Ministry of Finance reported on Thursday.
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Russia’s invasion of Ukraine created Ukraine’s budget deficit, which is about 20% of Ukraine’s GDP.
The total share of Canada’s contributions to ERA Loan amounts to 5 billion Canadian dollars (about $3.5 billion), the Ministry of Finance wrote.
“Canada is a reliable and steadfast partner of Ukraine. I am grateful for the support of the ERA mechanism. It is a fair and necessary tool to hold Russia financially accountable for its crimes in Ukraine,” the press release quotes Minister of Finance of Ukraine Sergii Marchenko saying.
After months of negotiations, the G7 countries agreed to create a tool that will enable payments from the Russian central bank’s immobilized sovereign assets. They were frozen after Russia’s full-scale invasion of Ukraine, as the West’s response to aggression.
The total amount of Russian assets varies between $210 billion and $300 billion, Kyiv Post previously wrote.
Out of the €45 billion ($50 billion) ERA loan, $40 billion is already signed on paper. Britain announced it contributed £2.26 billion (almost $3 billion). The US agreed to provide $20 billion.
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The European Union will allocate up to €35 billion ($37.84 billion). The sum could be less than this and it remains unclear how much the EU will actually disburse and permit Ukraine to spend on its defense.
The loan should help finance Ukraine’s financial needs in 2025, if the war stays at relatively the same level in 2025 and there are no new major shocks.
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