The UK government will give Ukraine an additional PS2,26bn ($2,93bn) from the profits of seized Russian assets in Europe.
It is Britain’s contribution towards a PS38bn (US$50bn) fund, announced by the G7 group in June.
Defence Secretary John Healey stated that the new money would help Ukraine improve its military equipment. He said it was “turning the proceeds from Putin‘s corrupt regime against him by putting them into the hands Ukraine”.
The aim, according to Chancellor Rachel Reeves, was to release money as quickly and efficiently as possible.
The UK will recoup the cost of the loan from the profits of the seized Russian assets, “within the legal framework”.
Reeves said that the UK did not confiscate Russian assets in Europe but used the profits and interest accrued.
Other G7 countries have also pledged to do so and are expected finalise their contributions within the next few weeks.
Payments to Ukraine will be made in installments rather than all at once. Some nations expect that some of the money will go towards Ukraine’s reconstruction.
The UK government has said that it is up Kyiv to decide how it will spend the UK contribution.
Healey said that the money announced will allow Ukraine to buy crucial military equipment such as air defences, ammunition and other vital items.
The PS2,26bn payment is a one-off payment. It is an additional PS3bn pledged by the government for Ukraine’s war effort.
The UK has pledged to continue this level of support.
The chancellor and the defence secretary both briefed journalists on the announcement while sitting side by side. Reeves said that the announcement showed the UK’s unwavering support for Ukraine.
Their appearance together could also signal a positive relation ahead of the Budget next week, when government will outline their spending plans for public services, such as schools, health and police.
Reeves was questioned about defence spending. She repeated that the government has committed to spending 2,5% of GDP, but without a timeline. The chancellor refused to give any details about the upcoming budget.