The UK has reinforced its support for Ukraine by signing a bilateral loan agreement worth £2.26bn ($2.84bn), aimed at enhancing the war-torn nation’s defence capabilities.
This financial support is part of the G7 Extraordinary Revenue Acceleration (ERA) Loans to Ukraine scheme, which collectively provides substantial aid to Ukraine. Under this initiative, G7 member states have pledged a collective sum of $50bn to bolster Ukraine’s economic stability.
Go deeper with GlobalData
The terms of repayment for this support involve utilizing the exceptional earnings accrued from Russian sovereign assets that are currently under sanctions within the European Union.
Earmarked exclusively for military purposes, the loan is set to empower Ukraine’s defences, with the initial tranche scheduled for disbursement next week.
The funding is planned to be delivered in three equal annual instalments of £752m.
This loan complements the UK’s ongoing commitment to provide £3bn annually in military aid to Ukraine.
The UK government aims to allocate 3% of GDP to defence in the subsequent parliament, subject to economic and fiscal conditions.
UK Chancellor Rachel Reeves said: “A safe and secure Ukraine is a safe and secure United Kingdom. This funding will bolster Ukraine’s armed forces and will put Ukraine in the strongest possible position at a critical juncture in the war.
“It comes as we have increased our defence spending to 2.5% of GDP, which will deliver the stability required to keep us safe and underpin economic growth.”
In February 2025, the UK announced a new military assistance package worth £150m ($187.5m) for Ukraine’s Armed Forces.
The aid package, which includes drones, tanks, and armoured vehicles, is set to be delivered by the end of spring 2025.
