The Japanese government will provide Ukraine with a loan of 471.9 billion yen ($3.08 billion at the current exchange rate) under the G7’s Emergency Revenue Assistance (ERA) initiative, Kyodo news reported on Monday.
It is noted that as of October 28, the G7 countries reached a final agreement to start providing assistance to Ukraine in the amount of about $50 billion and to distribute these funds, in particular, the EU will provide a loan of EUR 18.115 billion.
It is specified that each G7 country will conclude an individual loan agreement with Ukraine, distributing loans in installments from December 1, 2024, to the end of 2027. The loans will be repaid from the proceeds of Russia’s frozen assets, and Ukraine will not actually pay them back.
As reported, on October 25, the G7 in Washington announced that it had reached a consensus on a collective loan of $50 billion to Ukraine. Earlier, the United States said it would provide $20 billion under the ERA. Then, the EU confirmed plans to provide Ukraine with about EUR18 billion in 2025 in the form of new macro-financial assistance, the terms of which are tied to the Ukraine Facility.
On October 22, the UK also announced that it was providing Ukraine with a GBP2.26 billion (almost $3 billion at current exchange rates) military loan to purchase the necessary military equipment under the ERA.
Back in June, immediately after the G7’s decision on the ERA initiative, Canada announced the allocation of CAD5 billion ($3.6 billion at the current exchange rate) under the initiative.
The European Commission recalled that the consensus among G7 members was facilitated by the creation of a special Ukraine Loan Cooperation Mechanism (ULCM) by the EU, which will receive extraordinary revenues from frozen Russian sovereign assets and other voluntary contributions made by member states or third countries. These resources will then be used to repay the principal and interest under Ukraine’s relevant bilateral loan agreements with creditors.
The IMF, in its updated EFF program following the fifth review, noted that if the war ends at the end of 2025, Ukraine will need $33.1 billion of the $50 billion to support its budget: $19.1 billion next year, $9.2 billion in 2026, and $4.9 billion in 2027.
In a negative scenario, if the war continues until mid-2026, Ukraine’s budget will need all $50 billion to cover the deficit.
