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The US is willing to provide up to $20bn as part of a G7 loan to Ukraine that will be repaid with profits generated by Russia’s frozen assets, according to three people familiar with the matter.
The talks over the loan are accelerating as western officials want to provide funding to Kyiv before the end of the year, conscious that if Donald Trump wins the US election in November, Washington’s aid to Ukraine could be cut off.
G7 countries have been locked in months-long negotiations over the structure of the $50bn loan agreed in June, with Washington’s contribution until recently expected to be smaller than initially planned after the EU failed to guarantee that the Russian assets would remain immobilised for at least three years.
But US officials on Friday indicated to their G7 counterparts that Washington would provide the full original amount, about $20bn. This would be possible, they said, even if the EU failed to convince Hungary’s premier Viktor Orbán to drop his veto on extending EU sanctions — a condition demanded by Washington.
G7 finance ministers, who are gathering in Washington on October 25 on the sidelines of IMF and World Bank meetings, were expected to issue a statement with the loan distribution and structure, two of the people said.
One person familiar with the talks said no definitive agreement had yet been reached and the US was still consulting with members of Congress and Ukraine over how the loan would be repaid.
The EU last week approved its own contribution of up to €35bn to the G7 loan. Most of Russia’s frozen central bank assets are held in the bloc and are expected to generate about €3bn in profits per year. But the EU would need to contribute less if the US provided the full $20bn.
“I think it is important that everyone does their fair share,” said French President Emmanuel Macron on Thursday.
The UK, Canada and Japan are set to provide the rest of the $50bn loan.
But with Hungary vetoing a decision to extend the bloc’s sanctions regime against Russia, the EU was unable to meet Washington’s request to provide longer-term guarantees about the repayment scheme.
EU leaders meeting in Brussels on Thursday made a last-ditch attempt to convince Orbán to drop his veto, but the Hungarian leader did not relent.
The US Treasury declined to comment.