Japan has become the latest G7 country to extend financial support to Ukraine using the ERA mechanism that utilizes profits from immobilized Russian assets.
Ukraine’s Finance Ministry reported on 18 April that Japan will provide Ukraine with a loan of approximately $3 billion as part of the G7’s ERA mechanism utilizing frozen Russian assets.
The agreement, which took the form of an exchange of notes, was signed by Ukraine’s Finance Minister Serhii Marchenko and Japan’s Ambassador to Ukraine Masashi Nakagome.
The loan will be serviced and repaid using future profits generated from immobilized Russian sovereign assets. The financing is provided for a 30-year term, with the funds directed toward supporting priority budget needs and facilitating Ukraine’s reconstruction and development.
“Today’s agreement will not only help meet our urgent budget needs but also serve as further confirmation of Japan’s sincere commitment to the common values that unite our countries,” Marchenko said.
According to the minister, Japan has already provided Ukraine with budget support totaling more than $8.5 billion over the past three years.
Since the beginning of Russia’s full-scale invasion, nearly €280 billion ($318 billion) in frozen assets of the Bank of Russia have been identified abroad, with more than two-thirds located in the European Union. Belgian company Euroclear holds approximately €191 billion ($217 billion) belonging to the Russian Central Bank, earning about €4.4 billion ($50 billion) from these assets in 2023, the Financial Times reported.
In July 2024, G7 and EU leaders agreed to use interest from frozen Russian assets to allocate $50 billion to Ukraine. However, the United States demanded clear guarantees from the EU that the loan can be fully repaid with assets in the EU, as the EU sanctions against Russia are set to expire.
Washington later said it would not unblock Russian assets until Moscow pays full reparations to Kyiv.
In October 2024, G7 leaders approved a $50 billion loan for Ukraine to be repaid using profits from frozen Russian assets.
On 10 December, the United States announced a $20 billion loan to Ukraine to be repaid using frozen Russian assets, while the European Union will provide up to $35 billion, and the United Kingdom will allocate nearly $3 billion through the G7 mechanism.
