US will use frozen Russian assets to fund Ukraine defense

WASHINGTON - The Biden administration announced a new $20 billion loan to Ukraine which will be backed by the value of frozen Russian assets.

The loan, known as the Extraordinary Revenue Acceleration, is part of a package agreed to by the Group of Seven democratic nations in June to provide up to $50 billion in financial support to Ukraine. The assets were frozen after Russia's February 2022 invasion.

President Joe Biden said the move will allow Ukraine to "receive the assistance it needs now, without burdening (American) taxpayers."

In a call with reporters, Daleep Singh, the Deputy National Security Advisor for International Economics, said the other $30 billion in loans will come from a combination of G7 partners, including the European Union, the United Kingdom, Canada and Japan.

“To be clear, nothing like this has ever been done before,” he said. “Never before has a multilateral coalition frozen the assets of an aggressor country, and then harness the value of those assets to fund the defense of the aggrieved party, all while respecting the rule of law and maintaining solidarity.”

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Singh said he expected the loan to be made by the end of the year.

On Tuesday, the European Parliament approveda loan of about $37.7 billion while the UK. government approved $2.9 billion toward the $50 billion pledge.

The U.S. will provide at least $10 billion of the loan for economic support through a “financial intermediary fund” established by the World Bank.

The Biden administration hopes to provide up to $10 billion of the loan as military support, but that would require Congress’ approval by mid-December, Singh said.

"These loans will support the people of Ukraine as they defend and rebuild their country," Biden said.

“To be clear, either way, the U.S. will provide $20 billion in support for Ukraine through this effort, whether it's split between economic and military support or provided entirely via economic assistance,” he said.

The economic assistance, Singh said, will help with Ukraine’s energy needs and provide protection against drone attacks on substations and transformers.

Swapna Venugopal Ramaswamy is a White House Correspondent for USA TODAY. You can follow her on X @SwapnaVenugopal

This article originally appeared on USA TODAY: New Ukraine loan backed by frozen Russian assets, US says