The US Treasury Department announced on Tuesday that it has transferred the $20 billion portion of a $50 billion G7 loan to Ukraine to a World Bank bridge fund for economic and financial aid to the war-torn country.
The Treasury Department said the disbursement fulfills a pledge made in October to double the European Union's commitment to provide $20 billion in aid secured by frozen Russian accounts. For this assistance, smaller loans are also being contributed by Britain, Canada and Japan.
The move ahead of President-elect Donald Trump's inauguration in January is aimed at protecting those funds from a possible reversal by the new administration. President-elect Trump has complained that the United States is giving too much aid to Ukraine and has said he will end the war quickly, without specifying how.
The $50 billion loan over 30 years will be made possible by interest income from about $300 billion in Russian accounts that have been frozen since Russia's attack on Ukraine in February 2022. The G7 democratic nations had discussed the plan. for months and agreed on terms in October, before Mr Trump's election.
President Joe Biden's administration initially sought to split the $20 billion loan in half, with $10 billion to be used for military aid and $10 billion for economic aid, but the military portion would require approval by Congress, a process made more difficult by the Republicans' landslide victory in the election. With Tuesday's transfer, the entire amount will be dedicated to non-military purposes.
The US Department of the Treasury said that the amount was transferred to a new fund of the World Bank, "FORTIS Ukraine FIF". The governing board approved the creation of the fund in October, with only one country objecting, Russia.
The World Bank, whose charter prevents it from dealing in military aid, had managed a similar humanitarian and economic interim fund for Afghanistan.
US Treasury Secretary Janet Yellen personally supervised employees who made the $20 billion wire transfer to the World Bank fund, a department official said.
"These funds — paid for by proceeds from Russia's frozen accounts — will give Ukraine a vital boost of support as it defends itself against an unprovoked war of aggression," Secretary Yellen said in a statement.
"The $50 billion collectively provided by the G7 through this initiative will help Ukraine have the resources it needs to support emergency services, hospitals and other foundations of its courageous resistance," she added.
The strengthening of the US dollar, since President-elect Trump's November 5 election victory, has slightly reduced the estimated dollar credit. According to a G7 loan overview, the EU will provide $19.1 billion, Canada $3.52 billion, Britain $2.88 billion and Japan $3.11 billion. VOA (A2 Televizion)
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