It became known who will finance the EU's provision of 140 billion euros to Ukraine

The European Union is developing a unique scheme for providing Ukraine with a multibillion-euro loan, which will be funded by frozen Russian assets. The sum of 140 billion euros will help cover defense and budget needs, and Ukraine will return the funds only after receiving reparations from the Russian Federation. This was reported by "Radio Free Europe" citing an official document.

How much Russian money is in Brussels

About 176 billion euros in cash obtained from the Russian Central Bank's bonds in the Belgian Euroclear depositary are frozen due to EU sanctions imposed after Russia's full-scale invasion. The EU plans to use these funds to finance a loan to Ukraine through a debt contract with Euroclear at 0% interest. 

"This structure guarantees that the reparations loan will be considered by the IMF as a conditional obligation and will not be counted towards Ukraine's total debt," the document states. 

The repayment of the loan will depend on the reparations that the Russian Federation will pay to Ukraine after the war ends.

Key elements of the scheme for providing reparations credit to Ukraine

• Loan amount: 140 billion euros after payments on other obligations.

• Payment format: tranches under agreed conditions.

• Use: defense cooperation and budget needs.

• Asset protection: Russian sovereign funds will be returned after sanctions are lifted.

• Risks: EU countries' guarantees will cover possible losses.

The operation does not affect Russia's sovereign assets, which will be returned after sanctions are lifted, provided that the Russians end the war and compensate for the damages. 

"The reparations that the Russian Federation provides to Ukraine will be used to repay the loan from the EU, which the European Union will return to Euroclear," the document explains. 

The initiative was proposed by European Commission President Ursula von der Leyen on September 10, emphasizing that Europe and possibly G7 countries will bear the risks. 

Earlier we wrote that the EU is preparing a loan for Ukraine for 130 billion euros.