**Ukraine and UK Sign Deal to Use Frozen Russian Assets for Defense**
In a significant move, Ukraine and the United Kingdom have signed an agreement to use $3 billion in profits from frozen Russian assets to support the Ukrainian army and defense industry. This deal was announced by Ukraine’s Defense Ministry on May 27.
The funds will be used to purchase foreign-made defense products, repair and maintain military equipment, and implement joint projects with Ukrainian and international defense companies. The money will also be used to buy other critical materials, including those made in Ukraine.
**Background: The ERA Initiative**
This agreement is part of the G7’s Extraordinary Revenue Acceleration (ERA) initiative, which aims to use profits from frozen Russian assets to finance Ukraine’s defense and reconstruction efforts. The ERA mechanism provides loans to Ukraine that will be repaid using future profits from these frozen assets.
The UK has pledged to lend Ukraine $3 billion under this initiative, with the first installment of $970 million provided on March 7. The total value of the ERA initiative is $50 billion, with funds being used to support various aspects of Ukraine’s defense and reconstruction efforts.
**Boosting Ukrainian Defense Industry**
Ukraine’s Deputy Strategic Industries Minister, Davyd Aloian, believes that attracting excess profits from frozen Russian assets will significantly boost the production and repair capacities of the Ukrainian defense industry. He noted that Ukrainian enterprises have capacities worth $35 billion, but lack of funds has hindered their ability to utilize these resources fully.
“This agreement is a significant step forward in supporting Ukraine’s defense needs,” commented our expert on international affairs. “The ERA initiative has been instrumental in providing critical funding for Ukraine’s reconstruction and defense efforts.”
**Why This Matters**
Since Russia’s full-scale invasion began in 2022, G7 countries have frozen approximately $300 billion in Russian sovereign assets. The ERA initiative aims to use profits from these frozen assets to finance Ukraine’s defense and reconstruction.
The independence of our journalism depends on the support of readers like you. We’re committed to keeping our reporting free for everyone, without a paywall or compromise. If you want to help us reach 20,000 members and prove that independent journalism can thrive without these barriers, please consider joining our community today!
Read More @ kyivindependent.com
