(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.
European Commission President Ursula von der Leyen, announced the loan this Friday in a post on X within the framework of his visit to Kyiv.
“Russian relentless attacks mean that 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 the windfall profits from the Russian assets that are stranded.”
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 as collateral future windfall profits from Russian assets tied up in the European Union and elsewhere.
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 invasion of Ukraine in 2022.
About two-thirds of Russia's frozen assets, some 210 billion euros ($234 billion), are in the European Union, while just $3 billion is in U.S. banks.
The EU loan still requires approval by 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 a swift adoption,” the European Commission said. 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 funding mechanism stops short of directly seizing frozen Russian assets. The EU fears that such a move would discourage other countries from keeping their assets in the bloc.
Von der Leyen's visit to Kyiv comes just as Ukraine's winter heating season begins. Russian bombings of the country's energy infrastructure have intensified in recent months, leaving Ukrainians exposed to power outages.
On Thursday, the International Energy Agency said the upcoming winter will be the “toughest test yet” for Ukraine’s energy system.
