G7 agrees $50bn loan for Ukraine from frozen Russian assets

The G7 has agreed to use frozen Russian assets to raise $50bn (£39bn) for Ukraine to help it fight invading Russian forces.

US President Joe Biden said it was another reminder to Russia “that we’re not backing down”, but Moscow has threatened “extremely painful” retaliatory measures.

The money is not expected to arrive until the end of the year but is seen as a longer-term solution to support Ukraine’s war effort and economy.

Also at the G7 summit in Italy, Ukrainian President Volodymyr Zelensky and Mr Biden signed a 10-year bilateral security deal between Ukraine and the US, hailed by Kyiv as “historic”.

The agreement envisages US military and training aid to Ukraine – but it does not commit Washington to send troops to fight for its ally.

Some $325bn worth of assets were frozen by the G7, alongside the EU, following Russia’s full-scale invasion of Ukraine in 2022.

The pot of assets is generating about $3bn a year in interest.

Under the G7 plan, that $3bn will be used to pay off the annual interest on the $50bn loan for the Ukrainians, taken out on the international markets.

Speaking at a joint news conference at the summit’s venue in Puglia, southern Italy, President Biden said the $50bn loan would “put that money to work for Ukraine and send another reminder to [Russian President Vladimir] Putin that we’re not backing down”.