UK Announces £2 Billion War Loan for Ukraine

Chancellor of the Exchequer Rachel Reeves operates a Max Evo drone as Defence Secretary John Healey looks on at the Stanford Training Area to meet with British and Ukrainian troops training there, near Thetford, England, on Oct. 20, 2024. Leon Neal/PA Wire

Ukraine will receive a £2.26 billion loan for purchasing military equipment to defend itself in its war with Russia, the government has announced.

The loan will be repaid to the UK using profits on sanctioned Russian sovereign overseas assets which were frozen after the invasion of eastern Ukraine in February 2022.

The funds are the UK’s contribution to the G7 Extraordinary Revenue Acceleration Loans to Ukraine scheme, worth $50 billion (£38.52 billion). G7 leaders agreed that the money would be delivered to Kyiv for military, budget, and constructions needs at the summit in Apulia, Italy, in June.

“Russia’s obligation under international law to pay for the damage it has caused to Ukraine is clear and this G7 agreement is an important step to ensuring this happens,” the Treasury said in a statement on Tuesday.

In the coming weeks, the government will introduce domestic legislation which will facilitate the transfer of funds to Kyiv.

The £2.26 billion loan is on top of the government’s existing £3 billion a year commitment in military aid, as well as the £12.8 billion the UK has already committed in military, economic, and humanitarian support.

‘As Long as It Takes’

Defence Secretary John Healey and Chancellor of the Exchequer Rachel Reeves announced details of the loan after the ministers had visited Ukrainian soldiers being trained by British forces in the UK.

So far, the UK has trained more than 45,000 military personnel for Kyiv as part of Operation Interflex which has been extended to at least the end of 2025.

The government says the loan will be used for frontline military equipment, including artillery and air defence.

Healey said in a statement: “By using the money generated from these sanctioned Russian assets, we can help turn the tables on Putin’s war machine. This urgent funding will directly support Ukraine’s defence using the proceeds from assets that had helped fuel Putin’s aggression.

“The UK is stepping up our support to Ukraine, speeding up supplies of vital equipment and boosting our defence industries. We will stand with Ukraine for as long as it takes.”

Reeves added in the statement that it is in the UK’s interest to continue offering support to Ukraine because “the frontline of our defence – the defence of our democracy and shared values – is in the Ukrainian trenches. A safe and secure Ukraine is a safe and secure United Kingdom.”

UK Expands European Defence Support

The announcement comes after the UK agreed to put thousands of troops on standby to be sent to Estonia.

The agreement, which comes into effect in July 2025, signed by Healey and his Estonian counterpart last week will see the Army’s 4th Brigade put on “high readiness” and could see soldiers sent to NATO’s eastern flank within 10 days of being called up.

Healey said the commitment reinforces the UK’s contribution to the alliance.

The defence secretary had travelled to NATO headquarters in Brussels for a meeting with defence ministers where he also agreed to plans to lead the new Diamond air defence system, which will integrate member states’ missile defences as well as see European allies develop new long-range weapons.

“This is part of the UK’s new determination to work more closely with other European allies on security for the future, and Europe’s security is guaranteed by this Nato alliance,” Healey said.

Defence Secretary John Healey with soldiers and staff at the Stanford Training Area to meet with British and Ukrainian troops training there, near Thetford, England, on Oct. 20, 2024. Leon Neal/PA Wire

Also present at the NATO defence ministers’ meeting was Ukraine’s President Volodymyr Zelenskyy, who was there to outline his “victory plan,” which included asking for restrictions to be lifted on the use of Western-donated long-range missiles against Russia.

So far, Western leaders have not given public support to Zelenskyy’s request to remove the weapons restrictions.

Usage of the long-range missiles against Russia has remained off-limits over concerns it could escalate tensions between NATO and Moscow. Last month, Russian President Vladimir Putin said that allowing such strikes with Western weapons means NATO countries would be “at war with Russia.”