(CNN) – The European Union will lend Ukraine up to 35 billion euros ($39 billion) to help rebuild its economy, providing the bulk of a $50 billion loan agreed by G7 nations earlier this year.
The president of the European Commission, Ursula von der Leyen, announced the loan this Friday in a post on X within the framework of his visit to Kyiv.
“Relentless Russian attacks mean Ukraine needs continued support from the European Union,” he wrote, adding that the loan was part of “the G7 promise.”
The loan represents “a huge step forward,” von der Leyen told reporters in Kyiv. “We are now confident that we can deliver this loan to Ukraine very quickly, a loan backed by windfall profits from tied up Russian assets.”
The funds are expected to be delivered to Ukraine by the end of the year.
In June, the Group of Seven, which brings together some of the world’s largest economies, agreed to lend collectively around $50 billion to Ukraine, using future windfall profits from Russian assets tied up in the European Union and elsewhere as collateral.
Western nations froze Russian assets in bank accounts located in Europe, the United States and other countries as part of a massive wave of sanctions enacted after Russian President Vladimir Putin ordered the 2022 invasion of Ukraine.
About two-thirds of Russia’s frozen assets, some 210 billion euros ($234 billion), are in the European Union, while only $3 billion are in U.S. banks.
The European Union loan still requires approval from the European Parliament and a qualified majority of the bloc’s member states.
“Given the urgency of the proposal, the Commission will work (…) to ensure rapid adoption,” declared the European Commission. in a press release.
The announcement sends “a clear signal that the burden of rebuilding Ukraine will fall on those responsible for its destruction,” he added.
The financing mechanism stops short of directly seizing frozen Russian assets. The European Union fears that this measure will deter other countries from maintaining their assets in the bloc.
Von der Leyen’s visit to Kyiv occurs just as the winter heating season begins in Ukraine. Russian bombing of the country’s energy infrastructure has intensified in recent months, leaving Ukrainians exposed to power outages.
On Thursday, the International Energy Agency declared that next winter will be the “toughest test yet” for the Ukrainian energy system.
