Cabinet approves attracting up to $15 bln in grant via World Bank at expense of frozen Russian assets

The Cabinet of Ministers of Ukraine at a meeting on Friday approved attracting up to $15 billion in a grant for budget support from the International Bank for Reconstruction and Development (IBRD) of the World Bank Group. These will be the first funds within the G7 initiative to allocate $50 billion to Ukraine at the expense of income from frozen Russian assets

As representative of the Cabinet of Ministers in the Verkhovna Rada Taras Melnychuk reported on the Telegram channel, we are talking about attracting from the IBRD, acting as the executive institution of the Financial Intermediation Fund to assist in attracting resources for investment in strengthening Ukraine within the eighth additional financing of the Project Public Expenditures for Administrative Capacity Endurance in the amount of up to $15 billion.

A week ago, the Ukrainian government approved the terms of a contingent agreement, under which the American Federal Financing Bank (FFB) will provide a 40-year loan of up to $20 billion in line with the previously agreed G7 initiative to provide Ukraine with $50 billion from revenues from frozen Russian assets.

"The loan funds are provided by transferring to the Facilitation of Resources to Invest in Strengthening Ukraine Financial Intermediary Fund, established by the World Bank on October 10, 2024, in favor of the state," stated Cabinet of Ministers Resolution No. 1388 of December 6, published on the government portal.

It is specified that this transaction with contingent liabilities is carried out by concluding a Certificate Purchase Agreement between Ukraine as a borrower, FFB and the United States Agency for International Development (USAID), as well as a Loan Guarantee and Repayment Agreement between Ukraine and USAID and the issuance by Ukraine, represented by the Ministry of Finance as a borrower, of a Certificate of Indebtedness in favor of FFB, secured by a USAID guarantee.

The loan amount bears interest at a rate of 1.3% per annum plus the current average rate on one-year U.S. Treasury bills, and their repayment and repayment are carried out at the expense of income received from the frozen assets of the Russian Federation.

This week, the U.S. Treasury announced the allocation of the said $20 billion.