MOSCOW (dpa-AFX) - The European Commission has disbursed the first tranche of its Macro-Financial Assistance (MFA) loan for Ukraine, worth EUR3 billion, which will be repaid with proceeds from immobilized Russian State assets in the EU.
The total loan amount of EUR18.1 billion represents the EU's contribution to the G7-led Extraordinary Revenue Acceleration (ERA) loans initiative, which collectively aims to provide approximately EUR45 billion in financial support to Ukraine. This initial disbursement is aimed to help Ukraine confront Russia's attacks, maintain macroeconomic and fiscal stability, rebuild vital infrastructure, including its energy systems, and invest in defense infrastructure.
This MFA is crucial for addressing Ukraine's urgent budgetary needs, which have considerably risen in the face of Russia's intensified and prolonged war. With the stable and regular financial support to be disbursed in 2025 under this instrument, Ukraine will be able to support its current and future military, budget and reconstruction needs. This loan will be able to ensure macroeconomic stability and help restore critical infrastructure destroyed by Russia, such as energy infrastructure, water systems, transport networks, roads and bridges. The European Commission said the loan can also be used by Ukraine to directly support its military expenses. At the same time, by stabilizing public finances, this assistance will also enable Ukraine to allocate resources to other priority expenditures, including military defense infrastructure against Russian aggression.
Ukraine is not expected to directly repay the loan from its own resources. Instead, the repayment will be ensured through the extraordinary profits from immobilized Russian assets collected from the Ukraine Loan Cooperation Mechanism, sending a clear signal that the burden of rebuilding Ukraine will be shouldered by those responsible for its destruction.
This operation builds on the earlier MFA and MFA+ operations in Ukraine and complements the longer-term financing provided through the Ukraine Facility, which will make available to Ukraine EUR50 billion between 2024 and 2027.
Future payments to Ukraine under the MFA instrument are expected to continue between March and November, with EUR1 billion per month, with the remaining EUR6.1 billion allocated for December.
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