The Ministry of Finance of Ukraine has signed a Loan Agreement with the Japan International Cooperation Agency (JICA) for an amount of 471.9 billion Japanese yen, which exceeds 3 billion US dollars. On behalf of Ukraine, the document was approved by Finance Minister Serhiy Marchenko, and on behalf of Japan, by the head of the JICA Office in Ukraine, Hideki Matsunaga.
This is reported by Finway
Funding through the G7 ERA Mechanism
This financial assistance is part of the Extraordinary Revenue Acceleration for Ukraine (ERA) initiative, which the G7 countries developed to provide rapid support for the Ukrainian budget. Within this framework, Ukraine expects to receive a total of about 50 billion US dollars, secured by revenues from frozen Russian sovereign assets.
“The document provides for a loan to Ukraine in the amount of 471.9 billion Japanese yen (over 3 billion US dollars). The servicing and repayment of the loan will be carried out from future revenues obtained from frozen Russian assets,” the statement said.
Allocation of Funds and Future Prospects
The funds received from Japan will be directed towards financing priority expenditures of the State Budget of Ukraine. This will help support economic stability, the country’s development, and finance urgent needs, particularly in the areas of defense and infrastructure recovery.
Finance Minister Serhiy Marchenko emphasized that since February 2022, Japan has already provided Ukraine with over 8.5 billion dollars, of which 955 million were allocated on a non-repayable basis. According to him, the implementation of the ERA mechanism will ensure budgetary requests in 2025 and support financial stability in the medium term.
At the same time, Marchenko stressed that the ERA tool is a temporary solution. The main goal of Ukraine remains the establishment of an international compensation mechanism that will allow for the complete confiscation of frozen assets of the Central Bank of the Russian Federation and the use of these funds to compensate for the damages caused by Russian aggression.
It is worth noting that the previous tranche under this agreement was signed by the parties back in April. The ERA mechanism provides for up to 50 billion dollars to be allocated to Ukraine from the profits of frozen Russian assets, which are directed to support the state budget, military needs, and the reconstruction of the country.