The Ministry of Finance of Ukraine has announced the signing of a new loan agreement with Japan for 471.9 billion yen, equivalent to over 3 billion US dollars. The document was signed by Finance Minister Serhiy Marchenko and the head of the Japan International Cooperation Agency (JICA) office in Ukraine, Hideki Matsunaga.
This is reported by Kyiv24
Loan Under the G7 Extraordinary Revenue Acceleration Initiative
According to the terms of the agreement, the funds are allocated to Ukraine under the Extraordinary Revenue Acceleration for Ukraine (ERA) mechanism, initiated by the G7 countries. The total amount of assistance for Ukraine under this instrument may reach approximately 50 billion US dollars. The servicing and repayment of the loan will be carried out through future revenues generated from frozen assets of the Russian Federation.
“The document provides for a loan to Ukraine in the amount of 471.9 billion Japanese yen (over 3 billion US dollars). The servicing and repayment of the loan will be financed through future revenues obtained from frozen Russian assets,” the statement said.
Japan – One of Ukraine’s Largest Donors
Since the beginning of the full-scale armed aggression by Russia, Japan has provided over 8.5 billion dollars in assistance to Ukraine. Of this amount, 955 million dollars has been allocated on a non-repayable basis. Finance Minister Serhiy Marchenko emphasized that the implementation of the ERA mechanism will help meet Ukraine’s critical budget needs in 2025 and beyond.
The Extraordinary Revenue Acceleration for Ukraine (ERA) mechanism involves providing loan funds secured by revenues from frozen Russian sovereign assets to finance the state budget, military expenditures, and infrastructure recovery.
The funds obtained from Japan are planned to be directed towards covering priority expenditures of the State Budget, supporting the economy, and developing the country.
As the finance minister noted, the ERA mechanism is considered a temporary solution. Ukraine aims to establish an international compensation mechanism for the full confiscation of frozen assets of the Central Bank of Russia and their use to compensate for the damages caused by the aggression of the Russian Federation.
It is worth noting that the previous agreement regarding the tranche was signed by the parties in April of this year.