The European Commission has released the first tranche of an €18.1 billion exceptional Macro-Financial Assistance (MFA) loan for Ukraine, amounting to €3 billion. This financial aid, part of the broader G7-led Extraordinary Revenue Acceleration (ERA) loans initiative, represents the EU’s commitment to supporting Ukraine during Russia’s ongoing war of aggression.
The loan, which is the first installment of the EU’s contribution to the €45 billion G7 initiative, aims to bolster Ukraine’s macroeconomic stability, fund vital infrastructure repairs, and support military expenses amid the war. The funds will also be used to restore critical energy systems, water supplies, and transportation networks destroyed by Russian forces.
Uniquely, the MFA package introduces a novel repayment mechanism. Instead of Ukraine shouldering the repayment burden, the funds will be reimbursed using proceeds from immobilised Russian state assets held within the EU. This sends a powerful message: the aggressor will pay for the damage it has caused.
Key Features of the MFA Package
Flexible and Favourable Terms: The loan includes extended maturities of up to 45 years and is structured to alleviate Ukraine’s financial strain.
Repayment via Russian Assets: Revenues from immobilised Russian central bank assets, currently generating €2.5–3 billion annually, will cover repayments.
Support for Defence and Reconstruction: Beyond stabilising Ukraine’s economy, the funds are earmarked for military infrastructure and long-term rebuilding.
Unwavering EU Support
President of the European Commission, Ursula von der Leyen, highlighted the EU’s steadfast commitment:
“Today, we deliver €3 billion to Ukraine as the first payment of the EU part of the G7 loan. We give Ukraine the financial power to continue fighting for its freedom – and prevail. Europe has provided nearly €134 billion of support to Ukraine so far, and more will come. Just like the brave Ukrainian resistance, our support will be steadfast.”
High Representative Kaja Kallas added:
“Every day for over a thousand days, Russia has destroyed Ukrainian homes and targeted critical infrastructure. This loan will help repair the damage and allow Ukraine to allocate funds for defence. Russia started this war, and it must bear the cost.”
The Broader Context
Since the war began, the EU has mobilised €134 billion in aid, ranging from humanitarian support to economic and military assistance. This MFA disbursement builds on earlier support mechanisms and complements the Ukraine Facility, a €50 billion program supporting Ukraine through 2027.
The EU’s sanctions have immobilised Russian central bank assets worth approximately €210 billion. Extraordinary revenues generated by these assets will now finance Ukraine’s recovery, further reinforcing the principle of accountability.
Commissioner Valdis Dombrovskis underscored the significance of the initiative:
“This initiative demonstrates the strong international support for Ukraine and ensures that the aggressor pays for the destruction it causes. We will continue to provide Ukraine with all necessary assistance to end Russian aggression.”
Next Steps
The MFA funds will continue to be disbursed in monthly installments throughout 2025, with €1 billion per month from March to November and €6.1 billion scheduled for December.
As Ukraine confronts Russia’s aggression, this exceptional financial mechanism exemplifies global solidarity while ensuring those responsible for the war bear its economic consequences.
