Ukraine has approved the terms to receive a 40-year $20B loan secured by frozen Russian assets.

The Cabinet of Ministers has approved the terms of receiving a 40-year loan of up to $20B from the American Federal Financing Bank (FFB). This is part of the previously agreed upon G7 initiative to provide $50B to Ukraine that will be repaid using frozen Russian assets. According to the government resolution, the funds will be transferred to Ukraine through the Financial Intermediation Fund, established by the World Bank on October 10.

The agreement provides for the conclusion of a certificate purchase agreement Ukraine, the FFB, and USAID with Ukraine as the borrower, a loan guarantee and repayment agreement between Ukraine and USAID, as well as Ukraine’s issuance of a debt certificate in favor of the FFB, secured by a USAID guarantee. The loan will bear interest at a rate of 1.3% per annum plus the current average rate on one-year US Treasury bonds, and its disbursement and repayment will be made from the proceeds of Russia’s frozen assets.