On April 18, Ukraine’s Finance Ministry shared big news: Japan will give Ukraine a loan of around $3 billion.
$3 billion in assistance via a unique G7 mechanism
This is part of a special plan by the G7 countries to help Ukraine by using money made from frozen Russian government assets. This loan is not just any regular financial help. The so-called “Extraordinary Revenue Acceleration” (ERA) mechanism includes it.
This agreement was made official through a formal exchange of documents between the two countries. The loan will be paid back over a long period — 30 years. The unique aspect is that Ukraine will not repay it with its own funds. Rather, the money will be paid back from the earnings of the Russian government’s frozen assets. These are funds that Russia can’t access anymore, and the profits from these are now being used to support Ukraine.
The money will be used to cover Ukraine’s most important budget needs. This includes keeping essential public services running and rebuilding parts of the country damaged during the war. The funds will also help Ukraine work on development projects to recover from the damage it has suffered.
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Japan’s Ongoing Support and Background of Frozen Russian Assets
This $3 billion loan is not the first time Japan has helped Ukraine. Japan has already contributed more than $8.5 billion to Ukraine’s budget over the last three years. This shows Japan’s continued financial help during very difficult times.
The money that Japan is using for this loan comes from profits earned on Russian sovereign (government) assets that are frozen. The Russian Central Bank has these frozen assets. Since Russia began its full-scale invasion, countries around the world have blocked Russia’s access to a huge amount of its money stored abroad. In total, nearly €280 billion (around $318 billion) of Russian government money has been frozen. Most of this — more than two-thirds — is held in the European Union.
A big part of these frozen assets, about €191 billion ($217 billion), is held by a Belgian company called Euroclear. In 2023 alone, Euroclear made around €4.4 billion ($5 billion) just from interest and profits earned on these frozen Russian funds. The G7 and the EU agreed to spend these profits to support Ukraine rather than returning them to Russia.
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The leaders of the G7 and EU decided in July 2024 to provide Ukraine a $50 billion package using the proceeds from these blocked Russian cash. However, this agreement took some time to fully shape. The United States wanted solid proof that the money from these frozen assets in the EU would be enough to fully repay the loan. This was due to the fact that EU sanctions against Russia are not permanent and will eventually expire unless they are extended.
Later, Washington made it clear that it would not support unlocking Russian funds completely unless Russia pays full reparations for the damage caused in Ukraine. Despite these challenges, in October 2024, the G7 officially approved the $50 billion loan to Ukraine, to be paid back from profits made on frozen Russian assets.
In December 2024, the United States stated that it will give Ukraine $20 billion as part of this larger plan. This loan, too, will be repaid using profits from the frozen Russian money. Alongside the U.S., the European Union decided to contribute up to $35 billion, and the United Kingdom added nearly $3 billion. Under the G7’s ERA mechanism, Japan’s most recent $3 billion loan is a component of this concerted international endeavor.
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This kind of financial aid — where frozen Russian money is used to support Ukraine — is being used for the first time on such a big scale. It allows countries to provide help without using their own taxpayer money and ensures that Russia’s frozen funds are put to use helping rebuild what has been damaged.
This financial step is another example of how countries are using creative tools to assist Ukraine while keeping pressure on Russia. With Japan joining the group of countries offering help through the ERA mechanism, Ukraine gets further backing for its budget, reconstruction, and recovery process — all with money that Russia can no longer use.