The UK government has announced plans to extend a $2.84 billion (£2.26 billion) loan to support Ukraine’s military capabilities, with repayment to be sourced from profits generated by sanctioned Russian sovereign assets, according to an official statement released Saturday.
UK backs Ukraine’s military
Chancellor Rachel Reeves and Ukrainian Finance Minister Sergii Marchenko signed the formal loan agreement on Saturday, with the first tranche expected to be disbursed next week. The funding will be delivered in three equal annual installments of $945.49 million, the statement said.
The loan forms part of the G7’s Extraordinary Revenue Acceleration (ERA) Loans to Ukraine scheme, under which G7 nations have committed to collectively provide $50 billion in support for Kyiv. The UK government reiterated that Russia bears an obligation under international law to pay for the damage caused by its invasion of Ukraine.
“A safe and secure Ukraine is a safe and secure United Kingdom,” Reeves said. “This funding will bolster Ukraine’s armed forces and put Ukraine in the strongest possible position at a critical juncture in the war.”
The loan is in addition to the UK’s annual commitment of $3.77 billion in military assistance to Ukraine.
The announcement follows Prime Minister Keir Starmer’s pledge to raise UK defense spending to 2.5% of gross domestic product by 2027. The government has also signaled its intention to increase defense spending to 3% of GDP in the next parliament, subject to economic and fiscal conditions.
The statement described the move as the largest sustained increase in UK defense spending since the Cold War, underscoring that national security remains the government’s top priority under its “Plan for Change.”
Push for an end to the war
On Sunday, Starmer said the UK and France are working closely with Ukraine on proposals to bring the conflict with Russia to an end, according to an AFP report.
Speaking during crisis talks in London with European leaders, Starmer urged unity among allies, saying no one wanted to see a repeat of scenes like Friday’s heated exchange between Ukrainian President Volodymyr Zelensky and US President Donald Trump in the Oval Office.
“The United Kingdom, alongside France and potentially one or two others, will work with Ukraine on a plan to stop the fighting,” Starmer said. “We will then discuss that plan with the United States.”
Big number
The World Bank Group said last week that rebuilding Ukraine after three years of war is expected to cost approximately $524 billion over the next decade.
