Published by Global Banking and Finance Review
Posted on September 24, 2025
2 min readLast updated: January 21, 2026
The EU may offer Ukraine a reparations loan up to 130 billion euros, based on Russian assets. The loan's size depends on an IMF assessment of Ukraine's needs.
By Jan Strupczewski
BRUSSELS (Reuters) -The European Union's "reparations loan" for Ukraine could be up to 130 billion euros, EU officials close to the talks said, with the size to be finalised after the International Monetary Fund's assessment of Ukraine's financing needs in 2026 and 2027.
The idea of a reparations loan to Kyiv, based on cash balances of Russian assets immobilised in the West after Moscow invaded Ukraine in 2022, was floated by European Commission President Ursula von der Leyen on September 10.
The loan, aimed at helping Kyiv fund its war effort, would be repaid by Ukraine only once it receives reparations from Russia in a peace accord. The risk would be carried collectively by European and possibly also some other G7 countries, she said.
Most of the roughly 210 billion euros worth of Russian assets held in Europe are in Belgian central securities depository Euroclear. Officials said 175 billion euros of the assets in Euroclear have now matured and become cash that could be the basis of the new loan.
But officials said that before the EU would move ahead with the reparations loan, it would want to repay the 45 billion euro ($50 billion) G7 loan agreed last year.
That would leave some 130 billion euros from the cash balance available for the new instrument, three officials close to the discussions said.
USING RUSSIAN ASSETS WITHOUT CONFISCATING THEM
EU Economic Commissioner Valdis Dombrovskis said on Friday that the Commission would only decide on the size of the loan after receiving an IMF assessment of Ukraine's financing needs over the next two years.
No concrete details have been agreed, senior EU finance ministry officials have said. The Commission is working out a mechanism to allow it to use the frozen Russian assets without confiscating them -- a red line for many EU governments and the European Central Bank.
The reparations loan mechanism is likely to include a Special Purpose Vehicle to which the immobilised Russian cash from Euroclear could be transferred in exchange for zero-coupon bonds issued by the European Commission with the guarantees of EU and possibly G7 governments.
($1 = 0.8518 euros)
(Reporting by Jan Strupczewski; editing by Richard Lough and Ros Russell)
The International Monetary Fund (IMF) is an international organization that aims to promote global economic stability and growth by providing financial assistance and advice to member countries.
Frozen assets are financial resources that have been temporarily restricted from use, often due to legal or regulatory actions, preventing the owner from accessing or transferring them.
The European Commission is the executive branch of the European Union responsible for proposing legislation, implementing decisions, and managing the day-to-day operations of the EU.
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