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The United States is prepared to offer up to $20 billion as part of a G7 loan to Ukraine, which will be repaid using profits generated from Russia’s frozen assets, according to three sources familiar with the situation.
Negotiations for the loan are progressing rapidly as Western officials aim to provide financial support to Kyiv before the end of the year. There is a sense of urgency due to concerns that if Donald Trump is re-elected in the November US election, aid to Ukraine from Washington could be cut off.
G7 countries have been in discussions for several months regarding the structure of the $50 billion loan agreed upon in June. Initially, Washington’s contribution was expected to be lower than the original plan because the EU could not guarantee that Russian assets would remain frozen for at least three years.
However, US officials indicated on Friday to their G7 counterparts that they would provide the full $20 billion as initially planned. They stated that this would be possible even if the EU failed to persuade Hungarian Prime Minister Viktor Orbán to lift his veto on extending EU sanctions, a condition set by Washington.
G7 finance ministers, who are set to meet in Washington on October 25 during the IMF and World Bank meetings, are expected to release a statement outlining the loan distribution and structure, according to two of the sources.
While no definitive agreement has been reached yet, one source familiar with the discussions mentioned that the US is still consulting with members of Congress and Ukraine on the repayment terms of the loan.
Last week, the EU approved its own contribution of up to €35 billion to the G7 loan. The majority of Russia’s frozen assets are held in the EU and are projected to generate around €3 billion in profits annually. However, if the US provides the full $20 billion, the EU’s contribution would be reduced.
“I believe it is crucial for everyone to contribute their fair share,” stated French President Emmanuel Macron on Thursday.
The remaining funds for the $50 billion loan will be provided by the UK, Canada, and Japan.
Despite efforts to persuade Orbán to lift his veto, the EU was unable to secure longer-term guarantees on the repayment scheme due to Hungary’s opposition to extending the bloc’s sanctions against Russia.
EU leaders met in Brussels on Thursday in a final attempt to convince Orbán to reconsider his position, but he did not change his stance.
The US Treasury declined to provide a comment.