G7 Leaders Agree on $50 Billion Loan to Ukraine From Frozen Russian Assets

The United States and the West’s other large economies have agreed on a plan to issue a roughly $50 billion loan to Ukraine that would be repaid by interest and profits from nearly $300 billion in frozen Russian assets held in the West.

The promise of much-needed financial support for weapons and to begin to rebuild damaged infrastructure comes as Ukraine has been forced to sell some state assets and as the momentum in the war on its territory has shifted in favor of its foe, Russia, whose forces launched a full-scale invasion in 2022.

President Biden agreed to have the United States underwrite the entire loan, but American officials said they expected allies, including members of the European Union, to provide some of the upfront funds.

The loan would eventually be repaid through interest and profits earned on the frozen Russian assets, which would serve as collateral.

In a news conference Thursday with President Volodymyr Zelensky of Ukraine in Italy, on the sidelines of the Group of 7 summit, Mr. Biden said the agreement was another reminder to President Vladimir V. Putin of Russia that “we’re not backing down. In fact, we’re standing together against this illegal aggression.”

In New York on Thursday, Treasury Secretary Janet L. Yellen, an architect of the plan, said that the profits from Russia’s assets would provide Ukraine with additional aid in the future, making it harder for Mr. Putin to wait out the West.

“This is the first tranche, and if necessary there’s more behind it,” Ms. Yellen said. “In a sense, we’re getting Russia to help pay for the damage it’s caused.”

The president of the European Commission, Ursula von der Leyen, said on Thursday that all the members of the Group of 7, the world’s wealthiest large democracies, would participate, including the European Union itself, but the extent of each member’s participation was being worked out by finance ministers and other technical experts.

The European Union might contribute up to half the money, a senior European official said, speaking anonymously under normal diplomatic ground rules, while American officials said that Washington would make up any remaining difference.

The issue is complicated, because if the Russian assets are unfrozen or if interest rates drop significantly, then the interest and profits may not cover the loan, requiring a burden-sharing arrangement with other countries to guarantee repayment.

The idea of a loan using the assets is an American one, given the need to get money to Ukraine quickly and before the November U.S. election that could return Donald J. Trump, who has been more critical of aid to Ukraine, to the presidency.

The European Union had agreed to use only the yearly profits and interest from the assets — perhaps $3 billion — to aid Ukraine, but embraced the essence of the American plan once the issue of who would guarantee the loan seemed to have been resolved.

The money is expected to be disbursed through various channels, instead of being directly handed to Ukraine, so that it will be used for Ukraine’s pressing military, budget and reconstruction needs, the European official said.

Alan Rappeport and Tim Balk contributed reporting.